Parrett & Neves Ltd and EMAP PLC
A report on the proposed transfer of nine newspapers and certain
assets used in their publication owened by Parrett & Neves
Ltd to EMAP PLC
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Summary
On 18 May 1988, the Secretary of State referred to the Monopolies
and Mergers Commission the proposed transfer of nine newspapers
and other assets from Parrett & Neves Ltd (P & N)
to EMAP PLC (EMAP). The Commission were asked to report whether
or not the proposed transfer of the newspapers, which circulate
in East Kent, might be expected to operate against the public
interest.
The proposed transfer arose from the decision of P & N
that its weekly paid-for newspapers were becoming increasingly
vulnerable to competition from other media, particularly from
the growth of free newspapers. P & N accepted the EMAP
bid, one of eight that were received, because it was the best
combination of a satisfactory price with security for its
workforce and the prospect of the
continuance and development of the newspapers.
While much of the evidence we received was not against the
proposed transfer, some concern was expressed that it would
continue the trend of increased concentration of ownership
of local newspapers. Two companies, which publish paid-for
and free newspapers in East Kent, indicated their opposition
to the transfer suggesting that if it took place, EMAP, one
of the largest owners of
regional and local paid-for newspapers, would seek to dominate
the Kent market. This would, it was suggested, eventually
lead to a reduction in competition because some existing newspapers
would be forced to close down. One of the companies opposed
to the merger also suggested to us that a free newspaper,
recently introduced in Ashford, Kent, by EMAP, was involved
in excessive advertising rate cutting. This, we were told,
if it continued or spread, would result in the sale of
more titles, some of which would fall to established groups
thus increasing concentration of press ownership.
We considered the arguments about concentration and its possible
abuse. We noted that the transfer would add to concentration
in East Kent but that there was no overlap between EMAP's
existing titles and those it was to acquire. We also took
into account the competition between newspapers and other
media, and noted that opportunities for small companies to
grow remained. We had no reason to believe that EMAP would
compete unfairly in East Kent or elsewhere, but should there
be abuse the remedy remained of a complaint to the Director
General
of Fair Trading.
We believed that EMAP, a successful owner of paid-for titles,
will continue to exercise its policy of editorial freedom
and to maintain employment on the newspapers, thus outweighing
any possible disadvantages that might arise from the small
increase in concentration which is involved.
We therefore concluded that the transfer of the newspapers
may be expected not to operate against the public interest.
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