Local newsagents are a key part of a vibrant and productive small business sector across our State, and often the beating hearts of local shopping villages – especially in regional communities.
However, around 1,500 newsagents and other small businesses will face financial hardship and possible closure when the current Agency Protection Period expires in April.
The proposed new franchise agreement includes increasing the number of agents in the distribution network and allowing big businesses, such as the major supermarket chains, into the network; not providing any geographic or other form of exclusivity to the lottery agent; imposing expensive fit-out requirements on all lottery agents costing up to $25,000; and the sweeping of lottery agent bank accounts on multiple occasions per week, seriously disrupting cash flows.
Income from lotteries is typically around 40 per cent of turnover in a newsagent and can reach as high as 90 per cent – a loss of that business would place newsagencies across the state in financial jeopardy if action isn’t taken by government.
The NSW Lotteries business was built by small business. They should remain the cornerstone of the franchise in a fair commercial agreement with the private operator.
The plan to protect local newsagents and allow them to continue their traditional role as the primary retailer of lottery products includes:
- Enacting laws that preserve the current agency protections, until such time as the parties reach agreement on new terms;
- Continuing to restrict outlets selling lottery products to newsagencies and other small businesses; and
- Working with local newsagents and the private operator to ensure a sensible commercial arrangement is established that is fair to all parties.