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ABA to ask for investigation into REDgroup deal
05.07.11 | Lisa Campbell
The Australian Booksellers Association (ABA) is to ask the Australian Competition and Consumer Commission (ACCC) to investigate Pearson's takeover of the REDgroup online businesses.
The publisher said yesterday (4th July) it had agreed with REDgroup administrators Ferrier Hodgson to acquire the failed book chain's Borders and Angus & Robertson websites from 28th July, including their online and app-based bookstores.
The business would continue to operate under the Borders and Angus & Robertson brands for the foreseeable future, but its staff would move into Pearson's headquarters in Camberwell, Melbourne.
However, the ABA believes the move would "create monopolies in the supply chain" and reduce competition in the Australian market by giving an advantage to the Pearson-owned publisher Penguin Books.
ABA president, Jon Page, told the Canberra Times: "We're putting our concerns together into a report for the ACCC.
"Wholesalers being retailers is not new. However, the book industry is unique as parallel importation rights and territorial copyright create monopolies within the supply chain. Having a retailer with monopolistic control of different aspects of the supply chain is not good for competition for consumers and other retailers."
However, Dionne Higgins, Pearson Australia group c.e.o., was adamant there will be no competitive advantage for Penguin because the acquisition would be run as a separate business in Australia. She said: "Penguin won't be favoured, they will be transacting with this business in the same way as any other publisher. We'll sell across all publishers, so the range will be extensive."
News of the Pearson acquisition comes at the same time the REDgroup administrators Ferrier Hodgson announced the remaining Angus & Robertson book stores would close at the end of the month.
Bookseller and Publisher reports that two of the remaining 19 have been sold, with negotiations for the sale of a third underway. However, 16 will shut at the end of July, leaving 174 employees redundant. The 47 remaining Angus & Robertson franchise stores will continue to trade.