UK newspaper publishers and distributors will no longer be obliged to supply newsagents who order their papers, the Financial Times reported today. The UK Office of Fair Trading has allowed the 1994 National Newspaper Code of Practice governing the distribution of newspapers, to lapse in October as it was deemed to be out-of-date.

Small newsagents were distressed by the decision, fearing it will hurt their businesses when competing with large publishers and wholesalers. The decision comes as newsagents are currently lobbying the OFT to investigate the distribution of newspapers, a move prompted by a series of contract losses valued at £308 million for the country's smallest wholesaler, Dawson News.

The loss forms around 70 percent of Dawson's news division's revenue. The company's share price has fallen 75 percent since the March 11 announcement of the contracts terminations.

"Before the code there was a stifled quantity of retailers, and when it came in an extra 10,000 opened up in a handful of years," said Stefan Wojciechowski, head of news and magazines at the National Federation of Retail Newsagents (NFRN), representative for small, independent newsagents, according to the Financial Times.

"This is a highly monopolistic supply chain and we will have to see whether there will now be a contraction in the number of outlets."

The NFRN and the Association of News Retailing, which represents mid-sized newsagents, have appealed to the the OFT, fearing that retailers will no longer be able to compete with the regional monopolies of the large wholesalers Smith News and Menzies Distribution. The OFT has four months to request a Competition Commission inquiry into the newspaper distribution industry, the Financial Times reported..

The OFT has not yet reached a decision on whether to recommend an investigation.