The Government is now considering the recent Productivity Commission Report recommending the removal of parallel importation protection on books. This system was last modified in 1991, when the 30 and 90 day rules were introduced. Under these rules a publisher establishes their protection from parallel importation of a book if they publish it in Australia within 30 days of its international release. They maintain that protection provided they can resupply the book within 90 days.

Australian book sellers have joined together to support the compromise position suggested by the Australian Booksellers Association whereby parallel importation restrictions are maintained and the rules governing the protection are modified to also give booksellers and consumers protection. This would mean limiting the 30 and 90 day rules for first publication and re-supply to 7 days. This reflects the current reality in which booksellers operate their businesses. Internet providers offer consumers books from the day they are released internationally at cheaper prices and with free and fast delivery today, not release up to 30 days later and re-supply in 3 months.

In 1991 freight and delivery of books was very different and relied mostly on importation by sea. Most books today are delivered by airfreight or printed in Australia. Printing locally occurs because the book industry now operates on a just in time basis. Most books are sold within the first 12 months of their release. These front list books are regularly printed in Australia to ensure security of supply so publishers can supply books to booksellers when they are most in demand.

Since the 1991 rules the internet has revolutionized communication and commerce. Amazon commenced selling books in 1995 four years after our PIR rules were last changed. Today international internet book sellers operate on a completely different logistics and delivery timescale to that of even five years ago. For instance American wholesalers such as Baker and Taylor and Ingrams airfreight books directly to Australian consumers within 5 days of ordering. Internet booksellers can now deliver books to Australia in under a week.

What booksellers are proposing has already been operating successfully in Canada for the past ten years. In 1999 the Canadian Government introduced changes to their parallel importation rules to ensure that consumers were able to get books more quickly and that Canadian publishers did not abuse their protection and charge too much for books. These rules were introduced after the commencement of internet selling by Amazon.

While Canadian Publishers have been protected by PIR, consumers have enjoyed protection from overpricing whilst Canadian literary culture has remained strong and vibrant. An Australian version of the price cap would be simple to administer and would ensure that the protection provided to publishers does not come at the expense of booksellers and consumers.

Under the current anticompetitive arrangements in the Australian book industry bookstores have to accept whatever price and service Australian publishers provide because publishers are protected from any competition and charge wholesale prices that are much higher than overseas. For example the same multinational publishers charge 30% less for the same book in Hong Kong than in Australia.

Because of these higher prices customers are naturally going to the internet for cheaper books. The internet sales are impacting on booksellers businesses already and the trend will continue unless something is done to make our copyright system fairer to all participants in the book industry, in particular consumers. Booksellers believe that booklovers will continue to buy books in book stores provided the pricing and availability is competitive.

Last week the Australian Publishers Association, along with the Australian Society of Authors and others wrote to Government MPs saying; “ Consumers go to the internet for two reasons: price and diversity”. We couldn’t agree more. That is why booksellers have been demanding PIR rules that lower wholesale pricing and provide better range and availability.

Book sellers believe that if something isn’t done now to recognize the changes that have occurred since 1991at least a third of Australian booksellers will go out of business. That represents approximately 3,000 direct jobs. Without competitive wholesale prices and improved availability, the internet will swallow book selling businesses and jobs.

Internet sales account for 22% of total sales of books in the United States whilst the proportion here is 5% and rising fast, increasing by 20% since last year. Whilst internet sales will increase it is not inevitable that people will abandon their local bookstores. But to compete, book sellers need to be given a fair go and the current rules don’t do that.

If these measures were taken consumers would benefit from lower prices and better availability of books. This is what internet sellers can provide them with today. There is no reason why publishers cannot enjoy continued protection while providing these same benefits to Australian consumers. Other sections of the book industry such as authors and printers would still retain the security of the P.I.R regime.

As most books are sold in the first twelve months after publication the Coalition for Cheaper Books also supports the removal of the PIR system after twelve months. This would have the benefit of deregulating the backlist which has millions of slower selling titles and is therefore more cumbersome to manage.

The Government is understandably concerned to preserve jobs in these uncertain economic times. Retaining the current system will not preserve jobs in the book industry. The market share lost to American and British internet suppliers will not be quarantined to booksellers but will spread throughout the book industry. Sensible modifications to update the PIR system will allow the whole book industry to work and grow together.

Don Grover
The Coalition for Cheaper Books