WRITTEN QUESTION E-2886/02

by Brice Hortefeux (PPE-DE) to the Commission

(14 October 2002)

Subject: Price of newspapers

The introduction of the euro has made it much easier to compare the prices charged in different Member States for identical products. It can be seen, for example, that different prices are charged for the same newspaper depending on the country in which it is sold.

It is logical to assume, because of transport costs, that different prices might be charged for the same newspaper or periodical depending on whether it is bought in the country of publication or in another Member State.

However, some of the prices charged seem too high simply to be reflecting transport costs, particularly in the case of subscriptions to certain periodicals.

Does the Commission not take the view, therefore, that these pricing policies could be regarded as an obstacle to the rules of the single market and, if so, what steps does it intend to take to remedy the situation?

Answer given by Mr Bolkestein on behalf of the Commission

(14 November 2002)

According to a study commissioned by the Commission a couple of years ago, in general significant variations exists in cross-border subscription prices due to promotional offers for specific Member States; specific reader types, such as students, holiday-makers, businesses; a fixed duration, providing a discount on long-term subscriptions.

As a result, for one title a variety of subscription prices is available in individual markets and a comparison of subscription prices becomes very difficult. However, a comparison of standard annual subscriptions can provide an indicator of cross-border pricing for subscription sales.

As in domestic markets, cross-border subscription prices are, in general, lower than their single copy equivalents, reflecting the guarantee of a sale. According to the study, titles with low cross-border subscription sales appear to be charging the same price for an annual subscription across the Community. Given that the majority of these subscriptions are delivered via postal systems in the country of origin, a single cost is applied for distribution.

International titles, and in particular business titles with significant cross-border sales, appear to be charging different prices per market, reflecting, amongst others:

- different distribution costs per market, due to volume discounts and the use of a mixture of distribution networks;

- domestic competition and purchasing power;

- local VAT rates, which vary for newspapers between 0 % in Belgium to 22 % in Finland;

- higher costs as a result of a substantial higher number of unsold copies for non-domestic sales. For example, the above-mentioned study shows that the level of unsold non-domestic titles can represent up to 50-70 %, compared to 10-30 % for domestic sales;

- exchange rate fluctuations, although this no longer play a role within the eurozone.

The study concluded that the relatively low levels of cross-border sales as well as differences in prices between Member States are the result of poor economics of cross-border sales, rather than the effect of trade barriers. In line with the conclusions resulting from the study, different prices charged in different Member States for the same newspaper seem to reflect the above-mentioned difference in costs per national market. It can, therefore, not be concluded that differences in price per se result in obstacles to the

rules of the internal market. Therefore, as long as publishers pricing policies merely reflect the difference in distribution and other costs mentioned above and are not a result from trade practices infringing Community competition policy, no breach of EC Treaty rules occurs.