A move that set the book world afire

By Hasan Suroor

LONDON, DEC. 3. Britain's largest and most prestigious bookstore chain Waterstone's is under fire from academic and small independent publishers who have accused it of unfair trade practices for insisting on a minimum 50 per cent discount on each title that it stocks for them. In lay terms, this means that it would take the books from publishers at half the cover price but would not be obliged to offer a discount to the buyers.

Theoretically, it would be possible for Waterstone's to pay the publisher only eight pounds for a book priced at 16 pounds, and yet sell it to the buyer for 16 pounds. Currently there is no fixed discount, and it ranges from 30 to 40 per cent depending on the nature of the title and individual agreements. This is the first time that an across-the-board 50 per cent

discount is being demanded, irrespective of the means of a publisher.

Over 600 small and independent publishers have written to the Office of Fair Trading demanding an inquiry into Waterstone's trade practices alleging that it is exploiting its dominant position in the retail market to maximise its profits. They have accused it of violating the 1998 Competition Act, and of attempting to fix book prices arbitrarily.

``Ultimately, the bookbuying public will suffer either from a vastly reduced choice of books or from disproportionately increased retail prices,'' they have said in their complaint pointing out that the move would lead to `wholesale closure of businesses'. Smaller publishers would not be able to cover their costs if they were to offer such a huge discount.

Watersone's company which has a near monopoly of the British book market has sent out what publishers have described as a `provocative' letter to all its clients offering them a take-it- or-leave it option. It has made it clear that it would not stock books of those publishers who do not accept its new terms which include a 90 days' credit instead of the existing 60.

Apart from raising its profits, the move is intended to avoid stocking titles which do not sell well and clutter shelf space which can be used more profitably. It says that last year half the new titles it stocked did not sell, and currently it is stuck with an unsold stock worth over 15 million pounds.

The move is the idea of the company's new chief executive, Mr. David Kneale, who has come to bookselling from the chemists' chain Boots. He has upset publishers with his gung-ho and brusque style, and at a seminar of the Independent Publishers' Guild bluntly rejected the Guild's various suggestions to soften the blow.

``I must remind you that Waterstone's is a business. We have shareholders and have to make a profit,'' he told the gathering. When it was put to him that surely a distinction ought to be made between large publishing conglomerates and struggling independent publishers, he retorted: ``We cannot have 9,000 sets of discussions, it's just not feasible.'' On a TV programme, he was even more blunt. ``Why should Waterstone's subsidise small publishers?'' he asked.

If the complaint against it is upheld, Waterstone's can end up paying a fine of upto 10 per cent on its U.K. turnover. But that would require hard evidence of unfair trade practice which might not be easy given the complexity of the book market, according to trade experts.

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