The announcement yesterday that RedGroup, owners of Borders Australia and Angus & Robertson, had gone into voluntary administration is deeply disturbing news for the Australian Book Industry. Up to 2500 jobs are now under threat as are many small franchise businesses. This is going to have wide-reaching effects on all aspects of the book industry.
This is also a prime example of the two-speed economy in Australia at the moment. Retailers have all been warning for six months that the economic outlook is not good but time and again economic data is showing something else.
One of the contributing factors to RedGroup’s problems has been the “strength” of the Australian Dollar and the inability of retailers, due to Parallel Import Restrictions (PIRs), to do anything about the local price of books. Discounting to price match the overseas price is not sustainable and RedGroup have proven this.
Our dollar has been at parity with the US dollar for almost 6 months and there has been no major shift in prices by major publishers in Australia. In the past when our dollar has made dramatic drops prices go up almost immediately but that hasn’t happened the other way around.
The problem is that there is no competition to force the price down. Australian bookshops are handcuffed by PIRs so unless a new release title is published outside 30 days or a backlist title is out of stock for 90 we cannot source books for our shelves at cheaper prices. Each publisher is in effect a monopoly. The Australian consumer used to be in the same boat as the bookseller but the internet coupled with cheaper and faster shipping has meant the consumer is now in an open market and has choice on a global scale. The bookseller has none of these things. The bookseller has no choice in where they can be supplied from and are reliant on the publisher’s own distribution channels which at times can be slower than overseas suppliers.
Is the answer opening the market? I’m not sure but the current PIRs are out-of-date, out-of-touch and are causing great damage to the Australian Book Industry rather than protecting it.