Mag Wholesaler Denies it Will Exit Business

Source Interlink Cos. denied a news report that it is shutting down its magazine wholesaler business, while firing back at publishers that balked at wholesalers’ demands for higher fees.Source and Anderson News Co., which handle an estimated 50 percent of the magazine industry’s U.S. single-copy sales, demanded in January that publishers fork over an extra 7 cents per copy to deliver magazines to the nation’s retailers. It’s estimated that the fees would cost the publishing industry more than $150 million annually. Time Inc. and Bauer Publishing, parent of In Touch and Life & Style, moved to stop delivering product to those wholesalers rather than pay the fee. Comag Marketing Group, which delivers for Hearst Magazines, Condé Nast, Wenner Media and others, said it would keep working with Source and Anderson for now. Source president Jim Gillis said that publishers that suspended their relationships with his company Anderson would see their newsstand sales suffer while they try to switch to competing wholesalers, presumably The News Group and Hudson News. “AMI products, Time Inc. products and Bauer products, they’re not going on display,” Gillis said. AMI (American Media Inc.), publisher of Star and The National Enquirer, is distributed by Curtis Circulation Co., which Gillis said would discontinue shipping product to Source except for bookstore-bound copies. Gillis said publishers are acting in “lockstep harmony” to force wholesalers out of business in order to increase the publishers’ power over retailers.“This is about Curtis, AMI, Bauer and Time Inc. controlling retailer pricing by eliminating the number [1] wholesaler in North America,” he said. Foliomag.com Feb. 3 reported that Source and Anderson, which say they need the money to save their struggling businesses, were now closing down their wholesaler operations. The story cited an unnamed source at Comag.Comag president Mike Sullivan responded that the wholesalers were not going out of business. He also maintained that Comag is still supplying Source and Anderson with its clients’ magazines, contrary to the Foliomag.com report.“CMG continues to have a business relationship with Source Interlink and Anderson News to supply them with with our publisher clients' magazines,” Sullivan said in a statement via a CMG spokesperson.

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Mag Wholesaler Denies it Will Exit Business

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