Are Media is trialling the sale of selected top-selling magazines in a group of corporate stores owned and run by Australia Post, a government protected and owned monopoly.
This trial by Are Media could adversely impact small business newsagents. It could encourage people to stop shopping their local family owned newsagency and, instead, shop at their government owned post office.
Mercury Capital, the Are Media owners, have been announced as underwriting a rights issue for Ovato (OVT). Ovato controls magazine distribution in Australia.
We are concerned that the Australia Post relationship is a step toward reducing magazine revenue for small business newsagents.
That a government owned and run enterprise is being gifted this opportunity to the detriment of small business newsagents is most concerning.
We can see the possibility of Mercury grabbing the magazine distribution business from Ovato, further strengthening the Australia Post relationship and small business newsagents being a further risk.
Australia Post continues to encroach on what small business newsagents sell. Recently, Australia Post got Lego product – we suspect because they are government owned and protected. Newsagents struggle to get access to Lego even if they have an awesome toy department.
This is a local small business story. It is an important story. One you will most likely not see covered in mainstream media.
The local family run newsagency depends on local shoppers for magazines as a core traffic generator. The Are Media move puts that at risk.
While innovative newsagents are evolving their retail businesses to be less reliant on magazines and related legacy newsagency products such as newspapers and stationery, magazines remain core to the average newsagency business. They are important.
Leveraging government monopoly protection to take magazine revenue from a newsagency to a Post Office would, in our view, be detrimental to small business owners and to the community more broadly.
We call upon politicians to look into this and into the general retail operations of Australia Post more broadly. They need to focus attention on what this protected monopoly is doing to the harm of local family businesses – all for the profit of the government.
Ideally, questions will be asked as to why Australia Post needs to sell magazines. It’s a postal service. The Act under which Australia Post operates is clear.
