2017-04-03
Analysis 4/2017: Fixed book price - lobbying against the interest of books
The position of Civic Development Forum and the Mises Institute on the fixed book price bill was submitted to the Ministry of Culture and National Heritage on Friday 31.03.2017. The document points out negative aspects of the project and call for its rejection. You can read it here.
Synthesis
- The Polish Chamber of Books (PIK) is engaged in a non-transparent lobbying in the Ministry of Culture for the introduction of a fixed book price law. The bill would allow publishers to set the retail price of their books for the period of one year. The project is listed neither among the legislative tasks of the ministry nor projects undergoing social consultations. A brief message, in which the Ministry extended the deadline for submission of opinions on a fixed book price draft, redirects to a page of PIK itself.
- Contrary to the given justification, a fixed book price often have no positive effect on readership, while the lack of regulation does not lead to its decline. Countries with the lowest readership levels in the European Union are Portugal and Greece, which both introduced a fixed book price, while in Sweden, where readership is highest, there is no such regulation. In 2013, a fixed book price rule was in force only in 10 of the 28 EU member states.
- The proposed law will even have a negative impact on readership if it decreases library collections or if it makes supermarkets and small online bookstores withdraw from the market. The could be caused by (1) reduction of library discounts, (2) attack on supermarket model of discounting bestsellers, and (3) limitation on price savings offered by online bookstores.
- Proponents of the law present it as a remedy for the rise of prices but do not show how the fixed book price would prevent it. There is no evidence of such effects in other countries. Moreover, the alleged dramatic price increase is exaggerated. In recent years book prices have been rising slower than salaries of Poles. One should not expect that a move to cartelize the market, by enforcing the fixed price, will reduce the increase.
- The project protects the business model of traditional bookstores from the competition of online bookstores and supermarkets. A fixed price will prevent more efficient models from passing on savings to consumers in the form of lower prices.
- The bill will also help large publishers, hindering the current trend of increasing diversity of the book market. The authors point out that as a result print runs will increase: this means more bestsellers. It is hard to expect that the fixed price will increase the total print run of all books in Poland - after all, newspapers cost the same in every newsstand, but their print runs are falling. This why smaller publishers of niche titles protest against the draft.
- The fixed book price will negatively affect the parents' budgets, as new editions of school textbooks frequently appear so that they are forced to buy the new version. The problem will not be resolved by allowing a 15% discount to parent associations. Publishers would take it into account when setting the book prices.
Full communication by FOR (in Polish) available to download here.
You are welcome to contact our expert:
Rafał Trzeciakowski, Economist at FOR
rafal.trzeciakowski@for.org.pl
See also: The position of Civic Development Forum and the Mises Institute on a draft of a fixed book price law
Files to download
