Business

BURKLE CO. SUES OVER MAGAZINE DISTRIBUTION

The ongoing battle between magazine publishers and wholesalers took a turn yesterday after Ron Burkle’s Source Interlink Cos. sued several publishers and rival wholesalers claiming they’re trying to drive Source out of business.

The suit, filed in US District Court in Manhattan, claims the publishers and wholesalers conspired to drive Source out of business through “collusive anti-competitive” actions.

“If defendants’ schemes are not stopped, Source’s entire business, including its goodwill, reputation, 8,000-employee work force and customer base, will be destroyed,” the company said in its suit.

The suit names as defendants Time Inc., American Media, Bauer Publications, Hachette Filipacchi Media, Curtis Circulation, Distribution Services Inc., Hudson News, Kable Distribution Services, Inc., The News Group and Time Warner Retail Sales & Marketing.

The suit by Source marks the latest chapter in the week-long battle over a 7-cent surcharge. Anderson News, a Source competitor, has also imposed the fee hike, which went into effect Feb. 1.

A number of publishers balked at the proposal and refused to ship copies to the two wholesalers.

Source said it has since rescinded the fee, but publishers still refuse to hand over copies for shipment.

Anderson News, for its part said on Saturday that it could no longer stay in the magazine wholesale business and suspended “all normal business operations,” which effectively idled its 2,000 truck fleet.

For consumers, it means that the only celebrity weeklies that have reached all major retail outlets last week were OK! and Us Weekly, while a number of outlets won’t have the much-anticipated Sports Illustrated swimsuit issue.