O'Rourke's magazine pricing claims rejected

NEWSPREAD magazine distribution company has dismissed criticism of its pricing levels by Fianna Fail.

In the Dail yesterday the party's spokeswoman on enterprise and employment, Ms Mary O'Rourke, accused Newspread and Easons of operating "a virtual cartel" and "fleecing consumers". She called for an investigation.

Mr Laurence Roe, deputy managing director at Newspread, denied the claims and said its pricing structure was the same now as in 1981. He also disputed figures quoted by Ms O'Rourke.

She said the strong Irish pound should have led to British goods being cheaper. That had not happened, she said, and quoted a Business and Finance article which said that savings were not being passed on. With the Irish pound at £1.03 against sterling, a book valued at £20 in Britain should cost £19.33 here.

But it was in the area of magazine and recorded music prices that "the daylight robbery of consumers is particularly obvious", she felt. The prices of British magazines here are "between 10 and 20 per cent higher than they should be". She used the magazine Business Week as an example. In Britain it has a recommended cover price of £2. With tax, that should translate to £2.17 in Ireland, she said, but it was being sold for £2.59.

Mr Roe said that Business Weekly sold for £2.39. With VAT at 21 per cent on magazines here, the price should be over £2.40 in Ireland, he said.

It was the VAT rate which mainly accounted for the differential in prices, he said, and a "5 to 6 per cent" distribution cost. He also said that British magazines are bought three months in advance, and that whatever the fluctuation in exchange rates, they remain at the same price throughout the three month period.

He could not speak about books, tapes and CDs, as Newspread did not handle them, but felt the position was probably similar. Business and Finance had calculated that Irish consumers should be getting a 1 per cent discount on such, but "instead, there is a mark up of between 3 and 8 per cent".

Ms O'Rourke insisted that neither company should be let away with just correcting future prices, but "should be forced to compensate consumers for overcharging over the last year".

Mr Michael Ryder, managing director at Easons, did not wish to comment until he had read Ms O'Rourke's speech.