Members of the Canadian Booksellers Association will be monitoring new book wholesaler Pegasus for any irregularities associated with the company as it tries to find its niche in the marketplace. The Canadian Booksellers Association met with the Department of Canadian Heritage and the Competition Bureau last week after being flooded with concerns by its members over the formation of Pegasus, a national book wholesaler that is majority owned by Chapters Inc., Canada's largest retail chain (News, May 17).
The CBA said its meetings with both the Department of Heritage and the Competition Bureau, which focused on the possibility that Pegasus might give Chapters preferential treatment with respect to volume discounts, were very positive. "The ministry [Competition Bureau] was exceptionally helpful to the best of their ability," CBA's executive director Sheryl McKean told PW. "The key thing that we learned is that there is help available for us if we provide the right information to the Civil Matters Branch of the Competition Bureau. It is essential that we obtain the information if it is available."
McKean explained that "if the situation affects and is detrimental to the consumer, for instance if the price of books go up, then that would raise the flag for this Civil Matters Branch."
The CBA is also keeping its eye on the potential for unfair business practices, such as Pegasus c rcing a publisher into an exclusive selling relationship. The organization is not in a position to directly access any such reporting if it occurred, however, since a publisher would provide that information to the Competition Bureau in confidence.
McKean is eager to inform suppliers that they can complain to the regulatory authorities without worrying about incurring the wrath of Chapters. "It's good for them to know that should they like to discuss issues with the Civil Matters Branch, the talks are strictly confidential. Let's face it, [the publishers] are stuck between a rock and a hard place."
Meanwhile, Pegasus's president and CEO Dennis Zook was taken aback by the CBA's response. "I'm surprised that there is such a reaction questioning whether we are good for competition. We're setting up a wholesale company with terms comparable to any other wholesaler. I guess I don't know how that hampers competition."
