Author loser as book sellers turn up heat

Labour is struggling to implement a pre-election promise to reintroduce a ban on parallel importing, reports KARYN SCHERER.

Don't ask Auckland author Catherine Bell what she thinks of parallel importing. Or even what she thinks of the publishing industry.

You would expect her to be delighted. After all, Bell's book Everyday Epicurean was an international publishing success, and most New Zealand gourmets were more than happy to pay $39.95 for its culinary advice.

The problem was, some canny consumers managed to pick it up for just $14.95.

The driving force behind the Epicurean Workshop in Newmarket did not get a cent from the bargain-bin sales and nor did her publisher, Tandem Press, as the books were parallel-imported into New Zealand by Whitcoulls, which was offered it could not refuse by a British wholesaler.

Tandem Press managing director Bob Ross estimates Bell missed out on about $7000 in royalties.

The case is just one example of how National's decision three years ago to lift a ban on parallel importing is hurting local authors and artists, he argues.

While Tandem Press does not directly blame Whitcoulls for the cookery cock-up, it says it will be very upset if the Labour-led Government reneges on an election promise to ban parallel imports of new-release books, CDs, videos and software for up to two years.

Commerce Minister Paul Swain concedes Labour is struggling with the issue, following heavy lobbying by retailers, libraries, universities and consumer groups, all of whom argue that the benefits to consumers outweigh any small hiccups with the new regime.

Whitcoulls, which engaged heavyweight lobbyists Chen Palmer & Partners to argue its case, is quietly confident it has won the war over words.

"As they've got into it, they've realised that by bringing back a ban all they're going to do is stop customers having a chance to get some cheap product," says chief operating officer Fran Stanley.

While the weak New Zealand dollar has ensured the expected flood of parallel imports has been kept to a steady trickle, it has nevertheless prompted Whitcoulls to import between 10 and 20 containers each month of books that would otherwise not be seen here.

Not only that, but the mere threat of parallel importing has forced local publishers to be more timely and competitive with their titles, says Fran Stanley.

National book manager Joan Mackenzie says incidences such as the Catherine Bell one have been rare and could be addressed by simply placing a ban on the reimportation of local authors. Last month, she says, Whitcoulls sold more than 11,000 parallel-imported children's books at less than half their normal retail price.

"It seems to me that if they are concerned to protect New Zealand creative industries, imposing a blanket ban on me picking up some really cheap little board books from somewhere in the States is not in any way protecting New Zealand creative interests."

The Warehouse claims it is not worried about the re-introduction of a ban. Merchandise manager Nicholas Tuck says the chain is not bothering to parallel-import music or videos, and is bringing in only small quantities of books that would not otherwise be available here. Nevertheless, he disputes industry claims that parallel importing is hurting local authors and artists.

"To be frank, I think it is just a load of rubbish. Whether they invest in a local property and decide to promote that is really a commercial decision which depends on their view of its ability to sell. It has nothing to do with parallel importation."

Internet retailer FlyingPig is more alarmist. It says a ban will force it to move overseas.

Chief executive Mark Battles says he hopes the irony would not be lost on Labour, given its desire to foster "new-economy" businesses.

"Because of the foreign exchange difference we're getting hammered anyway. To lose additional margin because of local supply relationships would be very difficult."

Book Publishers Association president Kevin Chapman says retailers are missing the point. If publishers are making less money because retailers are cutting out the middlemen, they will be less inclined to keep offices here, he argues. And if they do not have offices here, they will not be publishing local authors.

"There are so many elements of parallel importing and the fact that we haven't been hit with the worst of it is no excuse for not keeping it. The fact that the dollar is in the toilet has protected us from the major impacts," he says.

"The fact is that people sit in New York and London every year and say: 'Why have we got a New Zealand company? Why can't we run it out of Sydney?'

"Or: 'Can't we run New Zealand and Australia out of Singapore?' Some companies already operate out of Australia and I don't see a lot of New Zealand publishing going on out of Australia."

It is an argument the music and film industries are familiar with.

Recording Industry Association chairman Terence O'Neill-Joyce says: "New Zealand is in a unique position, whether we like it or not, of having a multinational music industry which occupies over 90 per cent of the market.

"If you take them out of the equation it's going to take us a long time to rebuild what's been taken away, because those companies are no different from petrol companies - all they're interested in is profit.

"If the profit goes away are they really going to be allowed to invest in New Zealand material?"

Labour is also familiar with the argument. It was the very reason it suggested the ban.

"The problem with that approach that has been exposed," says Mr Swain, "is that the music industry had the very best year it ever had in 1999 under the first full year of parallel importing. The film industry has blossomed, and it is clear that has very little to do with parallel importing."

While he has not yet ditched the idea of a ban, he believes the main thrust of Labour's argument has been "somewhat lessened" by the extra money it has given to the arts.

"The argument essentially is that if you are going to improve New Zealand's creative talent the best way is to do it is upfront rather than an internal cross-subsidy through a parallel-importing ban."

If the Government does go ahead with a ban, some mechanism might be needed to ensure that creative industries reinvest in their local operations, he suggests.

"The potential policy difficulty is we could end up reimposing a ban which sees the price to consumers rising with not one extra dollar going into the industry."

One area the Government insists it will address is the problem of piracy, a big concern of the software industry. Mr Swain is also sympathetic to claims by cinema operators that parallel-imported videos and DVDs contributed to drops in box office takings of up to 35 per cent last year.

The problem, cinema owners argue, is that film distributors feel they can no longer wait to buy used prints for small towns, as impatient locals will have already rented parallel-imported DVDs.

Instead, they are buying new prints, which, at around $5000 each, are 10 times the cost of used prints.

But because they are so expensive, smaller towns are missing out and attendances are dropping.

Interestingly, Australia is following New Zealand's lead in allowing parallel importing. It lifted the ban on music three years ago, and is now considering the case for books and software.

But it is notable that it has decided to leave the movie industry alone, says Nelson cinema operator Mark Christensen.

A decision is expected in the next few months but, in the meantime, the music and publishing industries are far from relaxed about the outcome.

Tandem Press' Bob Ross, for one, says he will be furious if the Government does not honour its pledge.