Norway, Finland gang up on print media market

RIGA - A shake-up in Latvia's print media distribution appears to be underway, after the Finnish company Rautakirja told the Helsinki Stock Exchange on June 12 it had signed a letter of intent to buy a majority stake in a new wholesale distribution company, Preses Agentura Santa, whose formation was announced six days earlier.

Four of Latvia's leading press and publishing houses on June 6 joined forces to create Preses Agentura Santa, a printing and distribution company that Diena President Arvils Aseradens said would challenge Norwegian-owned Narvesen Baltija, which controls 60 percent of the print media retail market through its ownership of kiosks and brand stores.

But the announcement by Rautakirja throws this claim into doubt, since Rautakirja owns a 35 percent share in Narvesen Baltija.

As The Baltic Times went to press Aseradens said he was "surprised" by the Helsinki announcement but would not comment further.

Katrine Judovica, marketing director of Narvesen Baltija, said the two distribution systems of Narvesen Baltija and Preses Agentura Santa would continue to work independently.

"It would be positive for the two systems to compete, provided they operate under equal conditions," she said.

The four companies that agreed to form Preses Agentura Santa are: Diena, publisher of Latvia's highest circulation daily newspaper of the same name; magazine publisher Zurnals Santa; the printing house Preses Nams; and the Russian-language publisher Petits.

Each was expected to hold an equal stake in Preses Agentura Santa, but Rautakirja in its announcement said it would hold a 52 percent stake in the new company, leaving the others with 12 percent each.

Aseradens had acknowledged that the sight of Diena cooperating with its powerful business and political rival, Ventspils Nafta, which owns Preses Nams, was unprecedented.

"We never so much as phoned each other before, let alone shook hands," he said.

Narvesen Baltija achieved its dominant position when, last October, it purchased Preses Apvieniba - the successor company to the Soviet-era print distribution network, which owns most of Latvia's news kiosks. It also operates 30 news shops in the capital.

Since making the purchase, Narvesen Baltija has stopped using the services of Zurnals Santa's wholesale arm to supply its shops.

Aseradens claimed Preses Agentura Santa would concentrate on increasing sales at other outlets, such as supermarkets and gas stations, an undeveloped sector which, he said, Narvesen Baltija was "not interested in."

Rautakirja has a dominant position in Estonia's print media sector through its ownership of the Lehepunkt retail network.