Calls for ACCC to probe acquisition of REDgroup online retail

Published on Thu, 07/07/2011, 10:13:36

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Australian booksellers have raised concerns over Pearson Australia Group’s acquisition of the REDgroup online business.
 
The international media company also owns Penguin Group (Australia), which has retailers worried about competition in the market.
 
President of the Australian Booksellers Association (ABA), Jon Page, says his organisation has asked the Australian Competition and Consumer Commission (ACCC) to investigate.
 
“We’ve written a letter to the ACCC outlining our concerns, asking them to have a look at the acquisition to make sure that they’re comfortable with it and highlighted a few issues,” he says. “The main issue is the one regarding the monopoly of the supply chain.”
 
Page, who is also the general manager of Pages and Pages Booksellers in Mosman, explains while it’s not unusual for wholesalers to be retailers as well, the book industry is a different playing field.
 
“I think the book industry is unique because of territorial copyright. Legally bookshops in Australia can not buy Penguin books from anyone other than Penguin so that makes a situation where Penguin has complete and utter control over the supply of their books and also their retailer. I think there are some unfair competitive advantages they have that other retailers wouldn’t have.”
 
However, Pearson Australia Group chief operating officer Dionne Higgins says the company’s purchase of the sites shouldn’t have an impact as it plans to run the business independently of its other assets.
 
“As part of our due diligence in this acquisition, we have considered the relevant industry-related issues and have contacted the ACCC about questions that may be raised about this transaction,” she says.   
 
“It is our considered view that this acquisition will benefit not only the consumers but also the broader industry, as it is our intention to conduct the business as a separate, independent online retailer that promotes and sells books of all publishers to all Australians.”
 


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