Local newsagents face uncertain future

From the South Coast Register, 27 January 2015

NSW Labor claims some newsagencies in the Shoalhaven will close down after April 1, when a five-year moratorium that guaranteed NSW Lotteries were sold through small business venues, mostly newsagents, comes to an end.

The Newsagents Association of NSW & ACT (NANA) is concerned this means future sales will be through supermarkets such as Coles and Woolworths or through supermarket-controlled service stations.

The Labor Party has announced that if it wins the March 28 election it will extend the moratorium until affected parties agree on new terms.

Labor candidate for the South Coast Fiona Phillips said she was delighted at the announcement by Opposition Leader Luke Foley.

“Around 20 newsagents in the electorate and other small businesses will face financial hardship and possible closure when the current Agency Protection Period expires.”

Ms Phillips said a Labor government will give certainty to newsagents.

Although it was Labor that sold NSW Lotteries to Queensland’s Tatts Group Limited in 2010 for $1.01 billion, it placed the moratorium on the deal to allow newsagents enough time to prepare for possible sales through other outlets.

“I think Labor’s undertaking is a positive move that will protect newsagents,” Mrs Phillips said.

South Coast MP Shelley Hancock said Labor’s position was utter hypocrisy.

“They created this mess five years ago when they sold NSW Lotteries to Tatts. It was the Liberals who tried to help newsagencies in the first place by insisting on a moratorium.

“The government has been working with Tatts to make sure they do not go into Woolworths and Coles stores on April 1, and now have an agreement that new outlets will be restricted to service stations.”

Ms Hancock said NSW Lotteries was sold by Labor in a fire sale, and the party is now claiming it will effectively break the contract it set up with Tatts.

“This entails a sovereign risk, where breaking the contract might destroy a business’s confidence in the state.”

She said she would be visiting every newsagent in the area in the last week of January to explain to them fully what the government will be doing.

Vincentia Newsagency owner Dave Bennett said the NSW Lotteries was a big drawcard for his business.

“People are drawn to the chance of improving their lifestyle,” Mr Bennett said.

“Money from selling NSW Lotteries makes up about 30 per cent of our income.”

Mr Bennett said newsagencies were already diversifying to survive because of reduced newspaper and magazine sales. “We make 15 to 20 per cent of our income from consumables, now, such as ink for home printers.”

He said he was doubtful how successful NSW Lotteries would be selling their product through service stations and other venues.

“Apparently previous attempts to do this have not fared well.”

Mr Bennett believes the NSW government will support Labor’s attempt to extend the moratorium.

“I expect the government to make a decision in the community’s interest, not just the interest of NSW Lotteries.

“Newsagents play an especially vital role in small communities. I’m open 12 hours – 5.30 to 5.30 – and see many of the locals from Vincentia every day.”

Greg Sturgiss from Sturgiss-Newsagency on Junction Street in Nowra said the possible changes didn’t concern his business so much, but he was worried about the effect it would have on smaller agencies, especially in the country.

“A lot of the small newsagencies in the country would become unviable if the current moratorium ended,” Mr Sturgiss said.

“Newsagents are a hub business in many communities, and provide a number of vital services.

“NSW Lotteries is a leader for the business. People come in to buy a lottery ticket and shop for other things.”

He said NANA organised a petition against the end of the moratorium and got 100,000 signatures.

“People in Nowra were signing it and saying they were angry that the two big retailers, Coles and Woolworths, might be given another opportunity to pick on small business.

“The NSW government should extend the moratorium.”

Mr Sturgiss said that when the Queensland government sold its lottery to private enterprise, it arranged a 40-year moratorium.

“But when the then government sold NSW Lotteries it only signed up for a five-year moratorium.

“I think the government will heed the petition – 100,000 signatures cannot be ignored.”

Tatts could not be contacted for comment.