Bauer offered magazines to Government for a dollar, but says it got no clear response

Friday, 3 April 2020

Bauer offered to sell its New Zealand magazine business to the Government for just $1, but never got a clear response, a spokesman for the company says.

The German company announced on Thursday that it was closing its New Zealand business, which employed 237 staff and produced titles including The Listener and North and South with immediate effect.

A spokesman for Broadcasting Minister Kris Faafoi said on Friday morning that Bauer did not approach the Government for assistance prior to deciding to close its operation, but later clarified he was not disputing that such an offer to sell the business had been made.

Bauer offered to sell entire business for less than the cost of a single magazine.

Faafoi and Prime Minister Jacinda Ardern noted on Thursday that Bauer had elected not to apply to the Ministry of Social Development for a wage subsidy, or approach its bank for a government-backed loan of up to $500,000 – but they did not mention the sale offer.

Ardern described Bauer's decision to close the business as fairly abrupt.

* Prime Minister 'gutted' Bauer closing its doors, but says company refused wage subsidy

Broadcasting Minister Kris Faafoi drew attention to the assistance Bauer declined on Thursday.

* Magazines 'only product' banned from supermarkets**

The wage subsidy, which values $7029 per employee, requires companies make their best endeavours to keep staff employed at least until the end of June.

Bauer's spokesman said the company wrote to Faafoi last weekend.

'Bauer was explicit it was not interested in a short term subsidy or support, primarily because its view was that the issues of the business were much bigger than that and that it would be essentially dishonest to take a short-term taxpayer subsidy because it wouldn't resolve the issues,' he said.

But in its letter to Faafoi, Bauer did offer to sell the business 'essentially as a going concern and the Government obviously didn't accept that offer, he said.

'It was for $1.

'It was one line in a letter, saying 'this could be an option, if you want to consider it let us know'.'

Bauer did not get an official response, he said.

Selling the magazine business as a going concern, for whatever price, would have meant Bauer would not have been obligated to make redundancy payments to staff, as that responsibility would have been passed on to the buyer.

Faafoi's spokesman believed the letter was worded to indicate Bauer was willing to sell its New Zealand operation to 'another entity' for $1, but did not dispute that it was clear that its meaning was that the Government could be the buyer.

'I think the minister made it clear to them that the Government would not be in a position to take on the business and its liabilities,' he said.

It was clear that Bauer was set on a course to leave New Zealand, he said.

'This is a company that has been in financial strain.'

The Magazine Publishers Association has called for the Government to review its ban on magazine publishing during the level 4 lockdown.

Executive director Sally Duggan said on Thursday that magazines were 'the only product banned from supermarket shelves by government'.

'We believe our tight supply chains mean that magazine publication is not a safety risk and that magazines are a rich and important source of quality information and news coverage that we can ill-afford to shut down at this time of crisis,' she said.

Duggan estimated there were about 250 magazine and periodical publishers in New Zealand, employing 1500 people.

'A further 400 are estimated to be self-employed in the industry. That's just publishers – clearly the number of people employed in the wider industry, including printers and distributors is much much bigger, she said.

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