News International has decided it will remunerate retailers of The Sun on the basis of a standard cover price of 30p across the UK, rather than 35p as at the moment.
This means multiple and independent retailers’ margins will be hit by an extra 1.16p for every copy of the paper, which has a circulation of around three million, sold in England, Wales and Northern Ireland.
Since July 2008, retailers have received a retail margin of 8.12p on The Sun’s cover price of 35p, after News International introduced a price promotion on its cover price from 35p to 30p.
Now they will receive 6.96p on every copy sold. In comparison, retailers receive a retail margin of 10.71p on the 45p Daily Mirror, 8.47p on the 20p Daily Star and 12.1p on the 50p Daily Mail.
David Daniels, trade marketing manager at The National Federation of Retail Newsagents (NFRN), which represents 17,000 independent retailers, reacted with revulsion and contempt to the move by News International, which he accuses of breaking ranks with other publishers.
Daniels said: The other newspaper publishers have kept margin changes commensurate with cover prices. NI is breaking ranks.
He added: While NI says it wants to work more proactively with retailers, at the same time it has a knife poised to stab them in the back.
News International says that, having reviewed the success of the temporary price promotion, it is bringing its retail margin on The Sun into line with its current cover price of 30p and has no plans to revert to a 35p cover price and will apply standard terms across the whole country from this week.
The Sun retails for 20p in the Carlton, Granada, Yorkshire and Tynes Tees regions and 30p throughout the rest of the country.
Neil Jagger, circulation director of the Daily Mail, said: The big danger is that there will be no reaction from the retailers. If this is the case, then other magazines and newspapers will follow suit.
If retail groups want to work with groups who will put profits into the organisation and not take them out, then they should talk to us.
This article was first published on mediaweek.co.uk