Seven West Media and Bauer Media have hit back at the ACCC’s recent statement over the sale of Pacific Magazines.
In October this year, SWM sold Pacific Magazines to Bauer Media for a cash consideration of $40 million.
The sale was expected to completed by the end of the calendar year, subject to ACCC approval.
However, on Thursday the ACCC issued a statement with some concerns over the proposed acquisition, suggesting it is likely to lessen “competitive tension” by reducing the number of major print magazine publishers in key magazine categories from two to one.
The ACCC is also concerned about the loss of competition in the supply of content to readers between Woman’s Day (Bauer) and New Idea (Pacific Magazines), and the loss of competition between Take 5 (Bauer) and That’s Life! (Pacific Magazines).
In particular, the ACCC is focussed on the loss of competition for the acquisition of rights to exclusive photos.
Both Seven and Bauer have responded to the statement, suggesting it is both “disappointing” and that the ACCC has taken an “overly narrow view”.
In a statement, SWM CEO James Warburton said: “Advertising spend on consumer magazines represents only 2 per cent of total advertising spend in Australia, whereas internet advertising spend accounts for more than 46 per cent of total advertising spend in Australia.
“At a time when the ACCC itself is looking at the impact of digital platforms on traditional media businesses and in the face of proposed Government reforms to redress the imbalance between traditional media businesses and the dominant digital platforms, the concerns that have been expressed seem misplaced.
“The transaction represents an opportunity to provide a stronger base for these titles to compete into the future against digital platforms.”
Bauer Media general counsel Adrian Goss said: “In view of the ACCC’s own findings in its recent Digital Platforms Inquiry, we are surprised that it has not cleared the acquisition at this stage.
“While we are confident of receiving clearance in the New Year, the ongoing uncertainty is enormously challenging for Pacific Magazines’ staff and the business more generally. Bauer Media has always seen the acquisition as a positive step towards ensuring the sustainability of print magazine publishing in Australia.”
Both Bauer and SWM have said they will continue to engage with the ACCC as its process continues.
The ACCC is currently seeking submissions from interested parties.