Media Forum: Will OFT rules hurt magazines?

Could the OFT's distribution changes crush niche titles? Alasdair Reid reports.

If you believe the rhetoric of consumer magazine publishers, the industry is now heading towards its deepest crisis in living memory It's all to do with distribution - an unsexy mechanism that everyone took for granted but which is about to be turned on its head thanks to an Office of Fair Trading investigation.

Under current arrangements, distribution companies are allocated geographical territories where they are allowed to operate a monopoly - in return for which they must supply all relevant retailers with the titles they want on a more or less equal footing. The OFT now seems committed to abolishing that 'exclusive territory system' for magazines (although it will allow the system to continue for newspapers).

The knock-on effects are easy to plot. The existing big players will consolidate; and among the players gaining power will be the major retailers, notably Tesco. The bigger players will inevitably cherry-pick the best territories and neglect others. Small newsagents will be forced to carry a reduced range of titles and many local corner shops will just stop selling magazines.

In this vision of the future, smaller niche titles will inevitably go to the wall. The industry had been lobbying the OFT, confident that once the scales had fallen from its eyes, it would change tack. In March, a group of editors, including Vogue's Alexandra Shulman and GQ's Dylan Jones, wrote to Tony Blair arguing that the magazine business would face a pernicious form of censorship if the OFT gets its way.

However, the OFT has indicated in a 'provisional written opinion' that it remains unswayed. Ian Locks, the chief executive of the Periodical Publishers Association, says the campaign will continue. 'Magazine publishers look forward to discussing their concerns with the OFT and we are still optimistic that, before issuing any final opinion, the OFT will accept that unravelling the current supply chain would benefit only the giant supermarkets,' he says.

We shall see. But should any of this worry the ad industry? After all, advertisers are only really interested in the large-circulation mainstream titles from the major publishers, aren't they?