Stores fall out in magazine war

War has broken out among supermarket retailers over the thorny issue of magazine distribution, with J Sainsbury accusing Tesco and WH Smith of signing up to a "cosy" deal.

War has broken out among supermarket retailers over the thorny issue of magazine distribution, with J Sainsbury accusing Tesco and WH Smith of signing up to a "cosy" deal.

The comments were made last week at a private meeting of retailers aimed at forming a common agenda on the issue. The meeting was triggered after WH Smith, run by Richard Handover, signed an exclusive deal with Tesco to supply magazines to the supermarket's 658 UK stores. The deal triggered a fierce response from Britain's publishers and wholesalers, who claimed that it could force the closure of up to 12,000 independent newsagents.

However, at last week's meeting, hosted by the British Retail Consortium (BRC), a representative from J Sainsbury attacked Tesco and WH Smith for "stitching up a cosy deal", according to one insider. It is understood that J Sainsbury accused Tesco of having signed the deal so that it can sell its sandwiches in WH Smith stores.

A spokesman for J Sainsbury declined to comment, but a source close to the supermarket group said it was unhappy with the move towards national magazine distribution. It wants to thrash out an agreement with the publishers. The row is set to intensify this week as Safeway is close to signing its own deal with WH Smith to distribute magazines.

At the BRC meeting, which included representatives from Safeway, Waitrose, Tesco and WH Smith, the members agreed that the distribution system needed changing.

The BRC's most influential members rejected a report, published last month by the Newspaper Publishers' Association (NPA), which claims that if WH Smith were to supply newspapers to super-markets it could cost up to 15,000 jobs.

The Office of Fair Trading (OFT) is monitoring the row and has met Tesco and magazine publishers. But the larger supermarket groups fear that if the OFT launches an investigation, the NPA report may have an influence on the outcome.