Bad news as agents feel pressure
NEWSAGENTS are facing a "slow death" from the financial squeezes Tattersalls are proposing to put on their businesses, said one concerned Tweed agent, who asked not to be named.
With their profits gutted and "saleable goodwill" shrunk, many agencies will go to the wall, he said.
Agents still coming to grips with the possibility of losing Lotto ticket sales to supermarkets are to be further hit with a draconian franchise agreement to take effect on July 1.
"There are a lot of big changes in it, which will spell the end of many newsagents," the man said.
The new agreement would require agents to carry out - and pay for - a retail image upgrade, replacing the blue with new red and white branding.
The minimum cost for a small agency would be about $22,000. For others it could be as much as $40,000.
Upgrades would be required every seven years.
"Under the old government set up, the state chipped in for such work, but Tatts expects us to pay the whole lot," he said.
Further imposts upon the agents' income come from charges for use of the Lotto machines, and a further "franchise fee" for signing up with Tatts.
But the new agreement contains no guarantee that the right to sell Lotto, Powerball and "Jkpot" tickets would not be given to nearby outlets such as supermarkets, the man said.
Agents receive a commission of just over 8% on ticket sales, which will be reduced to 6% after the fees are paid - a loss of tens of thousands of dollars a year.
Newspaper publishers and suppliers of stationery and greeting cards are also concerned at the possibility of newsagents closing.
The privatisation of NSW Lotteries in 2010 was accompanied by a five-year agency protection period during which all existing arrangements with agents were to be maintained. That protection ends on April 1.
Head of the Newsagents Association of New South Wales and ACT (NANA), Andrew Packham, said the proposed franchise deal contained "a number" of significant and concerning elements which would make many agencies unviable.
NANA is touring the regions to listen to agents' concerns about the end of the protection period and formulate a plan of action.
They have launched an online and in-store petition to enable agents to let the public know the seriousness of the situation, Mr Packham said, and to call on the State Government to indefinitely extend the agency protection period.
The lapse of protection was likely to have long-lasting and devastating consequences for existing agencies and the broader local small business community as well, he said.