T R Beckett Ltd and EMAP PLC: A report on the proposed transfer of shares in T R Beckett Ltd from the Eastbourne Health Authority to EMAP PLC.

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On 22 November 1988 the Secretary of State for Trade and Industry asked us to investigate and report on the proposed transfer of 40 67 per cent of the voting shares of T R Beckett Ltd (Beckett) from the Eastbourne Health Authority to EMAP PLC (see Appendix 1.1).

Beckett is a private limited company whose principal business is the printing and publishing of local newspapers in Sussex. EMAP's local newspaper publishing activities include a number of titles on the South-East coast, particularly in Kent where it has recently increased its coverage, as well as in Sussex itself.

Whilst EMAP intends to acquire a majority of Beckett shares when the opportunity arises, it is content to continue until that time with a minority holding, without attempting to interfere with the Beckett management. For its part the Beckett Board is confident that it will continue to exercise full
management control for the foreseeable future. It nevertheless opposes the transfer of the minority holding to EMAP on the grounds that such a large holding by a competitor could create uncertainty. Whilst we are satisfied that there will be no immediate change in management control of Beckett arising from the proposed transfer of shares, we have to take into account the fact that
such a holding would facilitate EMAP gaining control if sufficient shares were to come on the market. Public interest issues therefore arise.

We examined the competition issues which might arise from the resulting concentration of ownership, taking into account three factors: the degree to which concentration of ownership of titles might lead to higher advertising rates, how much regional newspapers and other media compete with local newspapers, and the degree to which freesheets compete with paid-for newspapers.

We were not concerned about increased concentration of local newspaper groups at the national level; the increase of concentration of paid-for weeklies in Sussex as a whole was not in itself cause for concern, but we did find that high concentrations of paid-for weeklies in Eastbourne and
Seaford would reduce competition.

We therefore concluded that the proposed transfer to EMAP may be expected to operate against the public interest. The transfer should, however, be allowed on condition that any further acquisition of shares which gives EMAP control should be subject to consent by the Secretary of State. We suggest that the Secretary of State, while taking into account any changed circumstances, should consider whether such consent be conditional on EMAP divesting titles
in Eastbourne and Seaford so that its share of circulation of paid-for weeklies in each area did not exceed 60 per cent.

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