FAIRFAX
PROPOSED CONTRACTUAL FRAMEWORK
FREQUENTLY ASKED
QUESTIONS
This site will be
updated regularly with new information to help answer
questions from newsagents. Questions can be emailed to newsagentderegulation@mail.fairfax.com.au. Please include your name, shop
address and contract details with each query.
Q.
When will Fairfax begin to issue contracts?
A. From July,
1999 (approximately).
Q.
What are the contracts?
A. There are
three: home distributor, retail distributor and
retailer. The two distributor contracts must be
held together.
Q.
What is the contract term?
A. For existing
operators under the current authorised
agreements, the contract is for three years, with
an option for a further two years. Any new
contracts which are purchased or appointed after
our new system starts will run for three years,
with a one year option.
Q.
Do I need to pay for the initial contract?
A. No, it is
issued free to all existing operators for their
existing businesses.
Q.
Will I have to pay stamp duty on the initial
contract?
A. No, the
issuing of a contract does not attract duty.
Q.
Will the contracts be offered Australia-wide?
A. Fairfax plans
to issue the contracts in Victoria, NSW, the ACT
and south-east Queensland. In other areas, where
Fairfax volumes are lower, we are evaluating our
options. These may include issuing a simplified
single contract which would reflect existing
terms and conditions.
Q.
Can I trade my contracts?
A. Yes, subject
to Fairfax approval.
Q.
How many Fairfax contracts can I hold?
A. There is no
limit on the number of retailer contracts which
can be held by the same entity. Home and retail
distributor contracts must be held together for
the same territory: one entity will be allowed to
own contracts for up to five territories.
(Fairfax would consider requests to merge
non-viable territories within one contract).
Q.
If I buy up to five distribution contracts, do they
need to be located next to each other?
A. No, they can
be located anywhere. (Even if they are located
next to each other, you may still need to receive
separate drops of Fairfax product because of the
zoned advertising requirements).
Q.
Can I sub-contract my distribution business to
another carrier?
A. We will
encourage retail and home distributors to be
directly involved in the business. Fairfax will
consider approving sub-contracting if the
sub-contracting entity is involved in working no
more than five Fairfax territories.
Q.
What is the commission moratorium?
A. It is a
period to provide certainty to existing players
during the transition to the new system. During
the moratorium period all commissions for
existing operators will remain unchanged unless a
contract is traded. The moratorium will finish on
1 July 2000.
Q.
If I sell or divide my business after I sign a
Fairfax contract does the Fairfax moratorium on
commissions continue?
A. No, once you
sell the new performance criteria come into
effect.
Q.
Can I specialise in either distribution or retail?
A. Yes. You have
a choice of holding all three contracts or
specialising either in distribution or retail. If
you choose distribution you must do both home and
retail distribution for the same territory.
Q.
Can I be a distributor and retailer in separate
territory?
A. Yes, subject
to prior Fairfax approval. (You will, however,
receive your supplies separately because of
Fairfax' unique zoned advertising requirements).
Q.
What happens to the sub-agents of an authorised
newsagent?
A. At the outset
all existing subs will be allocated by Fairfax
under the existing territory boundaries to the
retail distributor.
Q.
Does an authorised newsagent retain his or her
existing territory?
A. All
authorised newsagents will be offered all three
contracts for their existing territories.
Q.
Will I have to enter into a Fairfax contract with my
subs?
A. No, your
existing subs will be assigned to you by Fairfax
when you sign up as a retail distributor, and
Fairfax will hold the contract directly with each
of your subs (news and general retailers).
Fairfax will need the assistance of retail
distributors to ensure all subs are signed with
Fairfax but you will not need to enter into a
contract with them yourselves.
Q.
How will a retail contract work for my subs who only
operate as "after hours" outlets for papers
and magazines?
A. Your
"after hours" outlets will be covered
by a general retailer contract, with any special
conditions (trading hours etc) stipulated.
Q.
Can my sub-agents source product elsewhere?
A. No. A
retailer would have only limited ability to
switch from Fairfax’s designated retail
distributor. If there has been a serious
unresolvable dispute or a breach of contract,
Fairfax may require another nearby retail
distributor to deliver to a particular retailer.
Q.
Can home delivery customers seek their papers from
another distributor?
A. Generally,
no. A subscriber or home delivery customer would
have only limited ability to switch from
Fairfax’s designated home distribution
contractor. If there has been a serious
unresolvable dispute or a breach of contract,
Fairfax may arrange for another home distributor
to deliver to a particular subscriber.
Q.
Can people apply for a direct account in my
territory?
A. Applicants
for new direct outlets will need to satisfy a
list of criteria which will be available shortly.
These criteria will include: the volume of
Fairfax product sold, trading hours, display
status, EDI, credit and payment terms, and
superior supply and returns management. Fairfax
will take into account the commercial impact on
Fairfax’s overall distribution network.
Q.
If one of my subs applies for a direct account with
Fairfax will I be notified?
A. Yes, a retail
distributor will be advised of all upgrade
applications in their area. All upgrade
applicants will be required to meet our criteria
for a direct account and if successful a 6 month
"probation" would apply, which acts as
a notice period for the retail distributor. For
upgrades from existing subs, this can be
"bought out" by negotiation between the
relevant retail distributor and the sub.
Q.
Can existing subs move to another retail distributor?
A. Fairfax may
approve a move only if there has been a serious,
unresolvable dispute. If a retailer physically
relocates the shop to another area, applications
can be made to Fairfax for a move.
Q.
Will there be a dispute resolution process?
A. Yes, there
will be a dispute resolution process between
Fairfax and the distributor and between Fairfax
and the retailer. The details of which will be
included in the contracts.
Q.
Will my commission change, and if so, how?
A. Commissions
may change at the end of the moratorium, or
earlier if a contract is traded. Commissions will
be based on satisfying reasonable performance
criteria. Commission details will be made
available shortly.
Q.
Will sub-agents' commission change?
A. Some may.
Retailer commissions will be based on volume and
performance criteria.
Q.
Will there be a home delivery fee that home
distributors can charge customers as now?
A. Fairfax will
set a maximum fee, the details of which will be
included in the contract. We plan to include a
mechanism for a regular review of that fee.
Q.
How will the contracts will be affected by GST?
A. Fairfax is
still working on determining the full, complex
ramifications of GST and we will include an
update on this page when details are finalised.
Q.
As a specialist newsagent will I be able to earn more
commissions than I do now?
A. There is the
opportunity for specialist newsagents who work
hard with us to grow our businesses to be able to
earn slightly increased commissions.
Q.
What is the procedure for merging non-viable
territories?
A. Applications
involving the parties from both territories can
be made to Fairfax.
Q.
Who determines the viability of a territory for
Fairfax products?
A. Fairfax will
consider any cases put to it for merging of
non-viable territories.
Q.
Will Fairfax supply supermarkets direct?
A. All new
applications will be subject to Fairfax's
criteria (see the "upgrades" section of
the Introduction to Fairfax's proposed
contractual framework). Chain stores will be
required to receive a local delivery to fit in
with Fairfax’s zoned advertising needs.
Q.
Will there be an Fairfax application fee for new new
account requests?
A. Yes, a small,
non-refundable fee will be charged on all new
account requests to cover administration and
processing.
Q.
Will the viability of existing distribution
arrangements be taken into account when considering
new applications?
A. Yes. Because
it is relevant to the on-going workability and
economics of the Fairfax distribution system it
will be one of many issues taken into account.
Q.
What happens if I do not sign a Fairfax contract?
A. It would be
in everyone's interests to sign so you have an
asset to sell.
Q.
I’d like to buy my neighbour’s area? When
can I start talking to him?
A. Once you have
both signed Fairfax contracts we will consider
applications, using a standard form, for you to
make a purchase of another Fairfax contract.
Q.
What is the procedure for selling a Fairfax contract?
A. You will be
supplied with details of how to contact Fairfax
for a contract sale.
Q.
The Council used to charge a fee for sale of
territories, will you?
A. Fairfax will
charge a small application fee and a small
transaction fee only to cover the
administration costs which we will incur.
Q.
In the event of a sale of my total business, will I
need to talk to all publishers separately about their
contracts?
A Yes. The
Council’s old role is not expected to
continue as a central co-ordination body.
Q.
Is stamp duty levied on the sale of a contract?
A. No, because a
new contract will be issued to the purchasers of
your business, rather than than the old contract
being transferred.
Last
updated 25 June 1999
|
