Book industry united in resolve to address liberalisation damage

Government not helping matters by maintaining its 25 percent VAT on books and refusing to introduce fixed retail prices for a limited period

Industry insiders claim that the diversity, quality and accessibility of Danish literature are threatened and want politicians to reintroduce fixed retail prices on books.


On Monday, representatives of the publishing companies, booksellers and authors met with the Cultural Affairs Committee and the culture minister, Marianne Jelved (Radikale), to discuss the situation of the Danish book market, which is claimed to be critical.


The meeting was based on a joint motion prepared by the Danish Publishers Association, the Danish Booksellers Association and the two associations for Danish authors. According to Bjarke Larsen, the editor of the trade journal BogMarkedet, it is very surprising but positive that the four associations have been able to agree. “This was unthinkable half a year ago and shows how seriously the industry believes the situation to be,” he said.


The associations believe that the root of the problem is the liberalisation of the Danish book market in 2001, when retail prices became free and the bookshops lost their monopoly on selling books. This led to supermarkets using bestsellers as loss leaders, forcing the bookshops to lower their prices in order to compete.


A recent example of this is the latest book from the popular author Jussi Adler Olsen, ‘Marco effekten’, which sold extremely well over the Christmas period and became the bestselling book of 2012. In spite of this, nobody (apart from Jussi presumably) made much money on the book because the supermarkets cut prices so much that the profit was minimal.


Traditionally, bookshops have spent the profits made on bestsellers to invest in other types of literature, thus sustaining a literary diversity and a wide selection of books for customers. However, the competition from the supermarkets has reduced the prices on bestsellers so much that the bookshops cannot sustain their selection if they want to compete, causing the death of one bookshop after another. And the financial crisis has not helped matters either. Since 2000, the number of physical bookshops has dropped from 423 to 338, with no fewer than 18 shops closing down in 2012 alone.


Marianne Jelved is booked to attend another meeting before Easter (Photo: Scanpix)Looking at the experiences of other countries, there would appear to be two main ways to regulate a book market. One of them is to lower the VAT on books, which a lot of EU countries have done. Denmark has the second highest VAT on books in the world (25 percent), but the politicians have made it very clear that this is not going to change. The other option is to introduce fixed retail prices on books for a limited period. This means that a book will cost the same for the first three months, whether it is bought in a supermarket, a bookshop or online. Denmark and Bulgaria are the only two EU countries that do not make use of either of these regulation methods.


In their motion, the four associations from the Danish book industry suggest a book law with fixed retail prices for a limited period on new books, supplemented with “assortment obligations and subscription models” as well as “other initiatives that promote books and reading”. Larsen agreed that a reintroduction of fixed retail prices is the most appropriate proposal to the politicians. “I cannot think of other proposals that would not result in a lot of other problems,” he said. “It is the only solution that can really make a difference.”


However, not everybody believes that the liberalisation is the cause of the book crisis and that the best way to solve the problems is reintroducing fixed retail prices. On February 20, the Competition Watchdog Forbrugerrådet sent an open letter to the culture minister in which they advised her against reintroducing fixed retail prices as this “will negatively affect the consumers”.


According to Forbrugerrådet, the liberalisation “has not been to the detriment of cultural considerations”. It claims that studies have shown that after the liberalisation “more people buy and read books, more books are being sold, more fiction is being published, the numbers of sales outlets have gone up and books have become relatively cheaper.”


These claims are contested by the studies presented by the trade associations, which makes it hard to establish the reality of the situation. This will be the parliament’s task in the coming weeks, and will also be the subject when the culture minister meets the Cultural Affairs Committee just before Easter.