Inside the Australian and New Zealand book industry

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Government set to drop parallel importation restrictions on books; industry responds

The federal government is set to repeal existing parallel importation restrictions (PIRs) on books after accepting the Competition Policy Review’s recommendations to drop PIRs.

The government published a full response to the report on 24 November, saying it will ‘progress’ with removing the restrictions once the Productivity Commission’s intellectual property inquiry has been completed in August 2016. The government noted that the Productivity Commission must now consider the government’s stance on PIRs in its intellectual property inquiry.

The government said it will consult with the sector on ‘transitional arrangements’. The Competition Policy Review’s report, which was published in March 2015, suggested PIRs be repealed within six months of the government accepting the findings, and that a three-year transition period be implemented to avoid ‘significant adjustment costs on book producers’.

The government said the removal of PIRs will ‘make local booksellers more competitive with international suppliers, promote lower prices for consumers and ensure the timely availability of titles’.

In total, 44 of the 56 recommendations in the Competition Policy Review will be implemented in whole or in part by the government, which also supports recommendation 12 that ‘remaining restrictions on retail trading hours should be removed’, although it notes that this is an area of state responsibility.

number of industry bodies and companies responded to the Competition Policy Review’s draft report in September 2014, including the Australian Booksellers Association (ABA); the Australian Publishers Association (APA); the Australian Society of Authors; the Copyright Council; and individual publishing houses, including Penguin Random House, Hachette, HarperCollins, Spinifex Press and Text.

The Competition Policy Review was formed by the Coalition government in 2013 to investigate Australia’s competition policies, and follows a number of federal government inquiries into Australia’s parallel importation restrictions. In 2009, the Productivity Commission recommended removing parallel importation restrictions on books. However, the government eventually opted for no change to the legislation. In 2012, the government launched a parliamentary inquiry into the prices of electronic products, including ebooks. The following year the inquiry recommended that Australia’s parallel importation restrictions be removed.

In 2012, the APA and ABA reached an agreement to work towards reducing the timetable for retention of territorial copyright from 30/90 days to 14/14 days, as recommended by the Book Industry Strategy Group (BISG) the previous year.

Industry responds

Australian Publishers Association (APA) CEO Michael Gordon-Smith said in a statement that the government has made a ‘poor and disappointing decision’, stating that booksellers will have fewer books to sell to local readers if PIRs are repealed. ‘If the government proceeds, this will result in a poorer environment for Australian readers because it will make it more difficult for smaller publishers to invest in marketing titles in Australia and more difficult to back Australian writers,’ said Gordon-Smith.

Gordon-Smith said the review’s recommendation was ‘based on an impoverished view of copyright and a misunderstanding of the book industry’. ‘Selling publishing rights to a territory such as Australia is similar to selling broadcasting rights to a station,’ said Gordon-Smith. ‘If it’s impossible to offer any exclusivity for even a limited time, it will make it unattractive to buy those rights. It will not mean readers get more for less; it will just mean they get less.’

Australian Booksellers Association (ABA) CEO Joel Becker told Books+Publishing there is ‘a wide range of views within the book industry, and even amongst booksellers, about the impact that this will have on the sector’. ‘We need a coherent strategy that ensures the best possible supply chain within Australia, and that protects the future of Australian bookselling, publishing, printing and writing,’ said Becker.

Becker said it is essential that regulations are put in place to ensure ‘there is no dumping of stock onto the Australian market; that local copyright is protected; that removal of the low value threshold, and the collection of GST on offshore purchases is pushed forward from its planned implementation on 1 July 2017; [and] that counterfeit editions of books cannot be brought into Australia’.

Gleebooks co-owner David Gaunt told Books+Publishing that a repeal of PIRs would not change the way books are ordered at Gleebooks, although he added that this may be different for other booksellers. Gaunt said he ‘could understand why publishers are against the changes on principle’, but that a repeal of PIRs was ‘inevitable’.

Avenue Bookstore owner Chris Redfern told the Financial Review that a repeal of PIRs could see local publishers reduce their lists, forcing booksellers to buy direct from overseas, and not necessarily at cheaper prices. ‘It could get quite expensive, with the average price of a hardback in the United States costing about $US25 to $US30 ($A35 to $A42),’ said Redfern. ‘Once you add GST and the conversion, it adds up.’

Australian Society of Authors chair David Day said removing PIRs threatens local authors and allows ‘the publishers of London and New York to get an even tighter grip on the Australian book market’.

‘Authors have already been hit hard by a big drop in book prices, which has caused an average halving of their writing income over the last decade,’ said Day. ‘Using academic theories about competition to interfere in the creation of Australian culture is sure to make the situation of authors even worse.’

Day added that ‘if authors’ incomes are reduced any further, some will be discouraged from writing altogether’. ‘It is self-defeating for the government to introduce a measure that will adversely affect local authors, bookshops and publishers for a hypothetical reduction in book prices,’ said Day.


Category: Local news