Editorial – Issue 35

Guest editorial: No longer Charing Cross Road

Once upon a time New Zealand had a fortress economy and by all accounts life was good but you couldn’t actually buy much. I didn’t live here then, but know from my own experience that goods in New Zealand often have price tags that give my little American heart palpitations. So it wasn’t all that long ago that I too thought parallel importing was a good idea.

Then on 19 May the Government lifted the ban on parallel importing, with the intention of sparing consumers the tyranny of agency rights on imported goods. It was an all-hail-moment when goods were going to get cheaper and consumers were finally going to get some real choice. As is New Zealand’s wont, we were once again world leaders as we strove to smash the monopolies created by international copyright agreements, agreements in which software companies, record companies, clothing manufacturers and even authors sell intellectual property for international distribution. Not wanting to upset the global giants (be it Microsoft or Nike), the Government increased the fine for pirated goods to $150,000. That the New Zealand dollar had collapsed some six months ago and was showing little sign of recovery was apparently not a variable in this new age of choice and spending.

As a consumer, a book reviewer and the manager of a book shop, I began what I can only call the “big wait”. Like most people in the book industry I wasn’t sure what parallel importing meant. As an educational bookseller in a shop which is owned by students, I know that prices are too high and that with the devaluation of the NZ dollar we saw increases this year of almost 20%. So while I hoped for lower prices, I began to see the scenario as one which wasn’t nearly as neat and tidy as the Government would have me believe.

My impressions of parallel importing are now framed by what I have for some months been reading in overseas reports on multinational take-overs of publishing houses, the rise of superstores, independents in peril, lawsuits for unfair trading practices (in particular those involving Penguin Books and Barnes & Noble) and the effects of on-line ordering. So while New Zealand still seemed small and insulated, it did occur to me that bookselling is an industry and that we are no longer on Charing Cross Road. Bookselling in the 90s is in fact a big money industry and while the net profit isn’t that of television or advertising, there is more at stake here than getting the latest John Grisham hardback for $19.95.

My suspicion grew that the big boys would rule in this brand-new open market. I feared that range would diminish as the publishers need to cater to the chains became paramount. I worried that sale or return (the policy whereby booksellers can return unsold stock to the publishers for a credit) would disappear as publishers would be unable to tell which stock was theirs and which had been imported. I worried about importing stock without the ability to return it if it didn’t sell, a practice which is the very backbone of educational bookselling.

My worries were in a sense confirmed when Stephan Preston, the general manager of Blue Star Consumer Retailing which runs the Whitcoulls group, made his views on parallel importing public in both the June 1998 edition of the Booksellers newsletter and at the Booksellers Conference. In print and during his Powerpoint presentation Mr Preston made clear that he thinks that parallel importing is a great idea, and because he sits in the very powerful position of “New Zealand’s largest bookseller”, to a very real degree parallel importing is about whatever Mr Preston wants it to be. Because in this little pond Mr Preston is our biggest fish, and while everyone knows this, no one can really afford to comment.

From what I can glean from reading and listening to the man, bookselling in New Zealand is about selling best-sellers only and broadening the number of titles available on retailers’ shelves, an impossible goal which is also shared by Mr Murdoch’s HarperCollins. It is about forcing the publishers to lower price and increase terms. It is about battling The Warehouse (yes, they sell books now too) with smarter technology and lower prices. It is about getting publishers’ representatives out of the shops and increased reliance on a super computer system for “product replenishment”. It is about “a scaling back of unprofitable local publishing”. It is above all about selling “media product”. He may be right and certainly he isn’t the first to give it a go. That he wants me to believe that all this is good for the book industry leaves me feeling a bit like the wife in the old Richard Pryor joke about the man who when caught in bed with another woman asks – “Who are you going to believe: me or your lying eyes?”

Then again maybe it will work. Without a doubt the smart independents will stay in business and others may even buy into the London Bookshops’ franchise scheme: a choice little deal where the independents get to sell their skills for a little Whitcoulls’ muscle. Either way, the independents stay out there selling what Mr Preston calls the “esoteric” titles while Whitcoulls continues to increase their market share. But with Whitcoulls’ huge buying power, and the ability to source cheap books overseas (or, better still, to use the threat of overseas buying to force the publishers to do their bidding), the independents will, I suspect, be forced to scramble to survive and, worse, start cutting margins, that magical place where wages come from. In other words – and I don’t think it takes a great deal of imagination to predict – a book world where all bets are off, and I’m not entirely sure how this will, in fact, benefit consumers. I do know that it will not benefit workers in the industry, especially those in retail.

You see, without the independents, customer choice becomes the will of a handful of buyers in Auckland and a marketing machine which decides through product placement the value of the typing between the covers. By Mr Preston’s own estimation, local book buyers within the chains and publishers’ representatives will no longer be needed. Local publishers, the “smart ones” at least, will work with the Whitcoulls groups to “rationalise their businesses” and in this new game making best-sellers is the very definition of business. Now all this rationalising will presumably leave little time for the publishers to sell all those “esoteric” titles that some people actually read, and, believe me, many local presses produce more than a few of those “esoteric” titles.

I prefer to think that I am not a voice of doom, and I do believe in lower book prices. It’s just that I also believe that when we make choices as both business people and consumers, we are entitled to a sense of the implications of our choices. I am personally not comfortable with the knowledge that many of the retail workers we call booksellers make just over the price of a large Big Mac Combo an hour. Likewise, as an employer I am torn between my desire to support local publishing (by not buying in remainders or overseas editions of local books) and trying to keep my workers in decent retail jobs. In short, I walked away from the Booksellers Conference wondering how you make the decision to screw some workers in order to protect others.

I am willing to allow that it is early days yet and that I do not know what parallel importing will mean in the coming months, let alone years. But I can report that at the time of writing the first remainders are arriving and I hear you can buy Barbara Anderson a whole lot cheaper at Paper Plus. Publishers’ lists are dwindling and (while no one will comment for the record) the titles which are brought into the country are those that the publishers think Whitcoulls will buy. Amalgamations between major publishing houses and new management strategies mean that people are losing their jobs. Independent booksellers are shopping in Southeast Asia as the cargo-loads of books arrive for the now endless wharf sales in all of the major cities. Retail wages have stagnated and anecdotal evidence shows skilled bookselling labour to be worth about $8.50 an hour. In real terms retail sales overall are not increasing while sales at The Warehouse continue to rise. All of which leaves me both as a business person and as a consumer boring my friends and colleagues with questions about real costs and real choices as we all, including Mr Preston, continue to ponder how we will somehow do the right thing.

Laura Kroetsch is the Manager of the Victoria University Book Centre which is wholly owned by the Victoria University of Wellington Students’ Association Trust.

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