Wal-Mart's U.K. Supermarket Demands Space in Magazines

Asda Wants Titles It Stocks to Give Two Pages a Month

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LONDON (AdAge.com) -- Asda, a U.K. supermarket chain owned by Wal-Mart Stores, is using its retail muscle to demand changes to distribution deals with magazine publishers, including a request for free space in magazines.

An e-mail sent out to magazine distributors last week asked for two pages of editorial or advertising space each month in titles to be chosen by Asda.

Controversy causes change of mind
The e-mail was apparently leaked to U.K. newspaper The Guardian and caused a media furor, leading Asda to backtrack on some of its proposals. Asda managers held a meeting on Tuesday with more than 50 distributors, wholesalers and publishers to discuss the suggested alterations to their distribution deals.

Other Asda demands, as reported in the U.K. press from the leaked e-mail, included a $20,000 annual fee for shelf space in the supermarket, plus an extra $5,000 fee per title for each new Asda store and a "set up" charge of $5,000 for each new title distributed in its stores.

Asda may have scaled down its proposals after they became publicly known, but the supermarket giant -- the No. 2 chain in the U.K. behind Tesco -- is still looking to significantly improve its deals with distributors.

Just a 'wish list'
An Asda spokesman declined to comment on details, but the chain has issued a statement saying, "The e-mail sets out a number of proposals aimed as a starting point to begin discussions. As with any negotiation, both parties have a wish list which will quickly change as middle ground is sought and an agreement that suits both parties is found."

Asda described its meeting earlier this week with key distributors and publishers as "positive."

The company statement continued: "Many issues were discussed and resolved. We would add that the use of 'editorial' was a mistake and should never have been included and has been removed from all further conversations."

Wal-Mart acquired Asda, a U.K. supermarket chain dating back to the 1920s, in 1999.
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