Price makes gripping reading in bookshops

"There can hardly be a stranger commodity in the world than books," wrote one commentator more than two centuries ago. And that was before publishers began printing them with recommended retail prices (RPs).

The display of these fixed but non-binding guide prices on book covers - non-existent on other commodities of a similar cost and nature - has been a source of controversy for many years with some viewing it as an anti-competitive relic of the British-based Net Book Agreement (NBA), which collapsed in 1994.

The NBA was never legal in Ireland - the Competition Authority refused to licence it and other price-fixing agreements between publishers - but booksellers admit it did operate here on an informal basis.

Since its collapse, the market is, in theory, freer. But, in practice, prices among competing bookshops are still remarkably close.

"In 90 if not 95 per cent of all cases we use the recommended prices and then translate them if necessary into Irish punts," says Mr Walter Pohli, manager of Hodges Figgis on Dawson Street in Dublin. "But it's an open market. There's no nationwide policy. If you want to discount by 50 per cent and lose money no one's going to stop you."

The implication is that retailers are working on such tight margins that discounting is not possible on the scale witnessed in the US or Britain following the collapse of the NBA. But, actually, booksellers receive on average of between 35 and 40 per cent of the cover price, a take which is comparable to luxury goods like perfume.

Mr Pohli says the relatively high margins are necessary to pay for overheads and expert staff. In addition, he says "it's counter-productive to discount all year round. Instead we do a bit to entice the customer in and buy the 90 per cent of books which are not discounted".

Mr Gordon Bolton, chairman of the Irish branch of the Booksellers Association, says most retailers stick to the recommended price "out of laziness more than anything else. Yes, there's price competition on the top 50-100 titles but, beyond that, no. You couldn't keep up with all the prices for a start."

Despite the convenience factor, however, he says recommended prices should be scrapped to give retailers greater freedom. "As long as you print a price on the cover it will be used as a guide. The consumer will notice if there is any difference, that's for sure. We think we should be allowed to sell books at our own price instead."

The Irish branch of the association has begun lobbying British publishers, who account for more than 80 per cent of sales in Ireland, for the prices to be dropped. However, Mr Bolton, who is attached to Eason & Son, says little progress has been made as British retailers are happy to retain RPs.

"It comes down basically to if WH Smith says no more recommended prices then it will be done. Ireland is just a small player, probably worth only 3-5 per cent of UK business."

In contrast, most Irish publishers are strongly in favour of retaining recommended prices and even creating new price-fixing arrangements in order to safeguard diversity.

"Booksellers don't care what they sell as long as they sell a lot of product," says Mr Michael O'Brien of O'Brien Press. "But books aren't just any other product like nails or deodorant."

He admits the RP system does result in some publishers "creating artificially high prices", especially for hardbacks, "in order to con the public into thinking they're getting discounts at the check-out". However, overall, he says it has the effect of "stabilising the market".

In 1993, his company was involved in drafting a price-fixing deal with other Irish publishers such as Gill & MacMillan, an agreement which was subsequently refused a licence by the Competition Authority. He believes such an arrangement is necessary to protect small publishing houses and independent bookshops from being priced out of the market.

"What it protects us from is booksellers coming to us and looking to sell a £5.99 book for £3.99 and suddenly we are getting nothing for our product and we find ourselves in a position of having to publish commercially."

"Very often the outcome of competition is monopoly," he adds. "The bigger people can afford to slash prices Dunnes Stores-style in order to blow smaller people out of the water. Then if you look at the range of books in, say, WH Smith, it's vastly smaller. There results a weird form of commercial censorship."

Similar fears were raised following the collapse of the NBA but they never materialised. In fact, as Mr Des Kenny of Kenny's of Galway, points out "more and more bookshops have started up all over the country".

He believes the phenomenon is partly due to the fact that customers are more interested in service and atmosphere rather than price. "Service is our main issue," he says, "primarily because a huge amount of our business is exports."

Mr Bolton of Eason & Son shares his view that "people don't really pay attention to price. They might be attracted by a sticker or notice of a discount but at the end of the day they'll only buy the book if they have a personal interest in it."