APA 'outraged' by A&R publisher contributions; criticism grows from trade and public

The Australian Publishers Association (APA) has taken the unprecedented step of publicly criticising a book retailer, with the association releasing a statement today (Friday) stating that its members are ‘outraged by the way in which Angus & Robertson have unilaterally taken action against a significant number of small and medium-sized Australian publishers.' APA CEO Maree McCaskill will be interviewed on ABC TV news tonight.

The APA's statement is echoed by the Australian Society of Authors (ASA), which has released a statement that accuses A&R's private-equity owners, Pacific Equity Partners (PEP), of ‘trying to bully their smaller suppliers into paying for the "privilege" of shelf space in Angus & Robertson-owned stores. They are hurting not only these publishers but also their authors.' The ASA is calling for a boycott of Angus & Robertson company stores, as are a number of individual authors who have contacted WBN.

Media attention Copies of A&R's letter to suppliers and the passionate response of Tower Books' Michael Rakusin have now been published by the Sydney Morning Herald and Crikey.com (subscription), and damaging mainstream media coverage continues--for example, the large number of negative comments posted by the public in reply to stories such as this one at the Sydney Morning Herald's website: http://blogs.smh.com.au/entertainment/archives/undercover/014948.html?page=fullpage#comments.

The SMH story is currently the most-linked-to item on influential international website Reddit.com, with close to 1000 readers from around the world ranking it above all the international news of the day.
A&R responds to Crikey Dave Fenlon, A&R's general manager, has written to Crikey, saying that he ‘understand[s] that the correspondence sent to some of our suppliers has caused offence.'
‘I completely acknowledge that the tone of this correspondence was inappropriate, and I appreciate the opportunity to set the record straight on our intentions,' Fenlon writes. ‘Firstly, I would like to assure you that the negotiations that are taking place between Angus & Robertson and our suppliers are not intended to have any impact on Australian authors and are purely about reaching a commercial arrangement with publishers.'
The full text of the APA and ASA statements, and Fenlon's letter to Crikey, are reproduced below.

WBN will continue to monitor the reaction to A&R's move, and will publish a further report in next Wednesday's newsletter. Continue to email your comments to bookseller.publisher@thorpe.com.au.

Full text of APA statementThe Australian Publishers Association (APA) said today that their publisher members, both large and small, were outraged by the way in which Angus & Robertson have unilaterally taken action against a significant number of small and medium sized Australian publishers - demanding a publisher contribution be paid within four weeks in order to remain a supplier to Angus & Robertson company stores. The amounts being demanded ranged from $1,500 to over $45,000.

Maree McCaskill, the Chief Executive Officer of the APA said, ‘More than half of the APA's membership has received letters from Angus & Robertson - either directly or through their distributors. Publishers and the authors they represent are understandably concerned and very distressed about Angus & Robertson's demands. Our publisher members have contractual trading arrangements with Angus and Robertson - negotiated and agreed to by both parties -and this demand for additional, significant sums of money which, if not paid, would mean a lack of access to any Angus and Robertson company stores, has come as an enormous shock.
‘This action has a major impact on the profitability of the publishing industry in Australia which, in turn, represents a significant number of Australian authors producing Australian literature and educational texts - books which are critically important to Australian culture, creativity and identity.' Maree McCaskill said.
As publishers, our members have a duty of care to their authors to ensure that their works reach the widest possible audience. Angus and Robertson's action is destined to limit this availability and we therefore urge them to engage in a dialogue with our members in order to ensure that consumers have as broad a choice as possible, and in order to ensure our publisher members continue to be able to build financially sustainable businesses.

Full text of ASA statementThe Australian Society of Authors today [Wednesday] condemned Angus & Robertson booksellers for its proposed imposition of a ‘pay to display' fee on over 70% of the membership of the Australian Publishers Association.
"This is an outrageous insult to Australian authors," Executive Director Dr Jeremy Fisher said. "Only yesterday the Australia Council highlighted the parlous state of Australian literature in education. Now, the private-equity owners of Angus & Robertson, Pacific Equity Partners, are trying to bully their smaller suppliers into paying for the ‘privilege' of shelf space in Angus & Robertson-owned stores. They are hurting not only these publishers but also their authors. Angus & Robertson is stealing money from Australian authors, whose average income is only $11,000. Why, that's an amount which is probably even less than the daily income of the directors of Pacific Equity Partners."

In a proforma letter to its suppliers, Angus & Robertson makes the extraordinary statement that "over 40% of our supplier agreements fall below our requirements in terms of profit earned". It seems they only want to stock books from publishers (and authors) with guaranteed saleability. If this is their attitude, the ASA calls on all bookbuyers to boycott Angus & Robertson-owned stores because their proposed policy is such an insult to Australian authors.
Note: Angus & Robertson franchisees are not subject to the company policy. The ASA does not call for a boycott on Angus & Robertson franchisees.

Full text of Dave Fenlon's letter to CrikeyDear Crikey and Crikey Subscribers,
Thank you for giving me the opportunity to respond to the issues raised in your online newspaper yesterday. I have also received many emails from concerned readers and I am doing my utmost to respond to these people personally.
I understand that Crikey and its readers are alarmed by the negotiations that Angus & Robertson is currently seeking with a number of its suppliers. I also understand that the correspondence sent to some of our suppliers has caused offence.
I completely acknowledge that the tone of this correspondence was inappropriate, and I appreciate the opportunity to set the record straight on our intentions.
Firstly, I would like to assure you that the negotiations that are taking place between Angus & Robertson and our suppliers are not intended to have any impact on Australian authors and are purely about reaching a commercial arrangement with publishers.
Angus & Robertson is a major retailer of Australian titles, with 30% of top selling lines made up by Australian authors. It is vital that we have a sustainable business that can continue supporting Australian authors over the long term.

Over the past three years we have invested over $14 million in the growth and expansion of our business to bolster the industry and ensure accessibility and value for our customers. Despite our best efforts, we too are under increasing pressure to survive as we are squeezed by major department stores and online stores, resulting in our company-owned stores making an operating cash loss this year.
As a commercial business, we have the right to make decisions about which suppliers we do business with. In our negotiations with suppliers, we are the customer. Unfortunately we cannot work with every publisher in Australia, particularly if the relationship is not commercially viable for us.

To give you some context, we currently have 1,200 suppliers to our business and have sent letters to 47 of those whom we hope to hold discussions with over the coming weeks. The payments we have requested from those suppliers represent a gap payment for profits that were lost or costs that were incurred as a result of our commercial relationship with those particular suppliers.
We are trying to operate a successful bookstore chain and if we cannot strike a balance that allows us to maintain our retail operations, the impacts on the industry will be far greater if we are forced to close stores or drastically cut down titles.
Again, let me assure you that this is not about penalising authors. It is about establishing commercial arrangements with our suppliers that are viable for both parties and that allow us to offer the best value to our customers.
Over the past year we have hosted an increased number of in-store author events allowing our customers to meet and interact with new authors from smaller publishing companies, or those starting out with an initial book.

This is in addition to personal relationships hundreds of authors have with their local Angus & Robertson, many of them finding an opportunity to promote their titles to their local communities through our bookstores. We also have a history of selling self-published books to great success.
I do hope that this goes some way to explaining our position and I assure you Angus & Robertson remains very committed to selling Australian published books from a large range of Australian publishers, large and small.
Best regards, Dave Fenlon.
Published: 10/08/2007