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What drives the price of books in SA?

Image: http://bookslive.co.za/

For every 10 books sold in South Africa‚ six are for basic education‚ one is for tertiary education and three are general fiction or non-fiction.

This is according to a study by the South African Book Development Council (SABDC)‚ commissioned and funded by the arts and culture department and conducted by Genesis Analytics.

The study wants to help government‚ industry players and stakeholders work together to make books more available and drop their prices.

The study looked at three types of books: * Educational books - Used in primary and secondary school; * Academic books - Used in tertiary education; and * Trade books - Fiction and non-fiction books for the general market. The study found the biggest factor driving book prices is the size of print runs. The more books you print‚ the cheaper they become.

“The setup cost of a print run is high since the press needs to be calibrated (which is time-consuming and can use a large amount of paper) before use and thoroughly cleaned after use.” It can cost from R500 to R6‚000 an hour.

“The collapse of educational spending in the late 1990s led to a drastic reduction in the number of South African printers that are able to produce a complete book.”

Another factor is that locally produced paper is priced at import parity.

“This implies that the price of local paper is equal to the international price of paper‚ plus all the costs associated with importing the paper. Since the cost of importing paper ranges from 4-11%‚ local paper could be up to 11% more expensive than the world price of paper‚ even if the paper is produced locally.”

The study found that reducing paper costs by 11% would only reduce the cost of educational books by 2.53% and trade books by 2.47%.

It also found readers often buy books in high-rent shopping centres‚ which require knowledgeable staff and large stores.

“Rent (41%) and salaries (35%) make up the bulk of booksellers’ overheads.”

The largest booksellers in the country are Exclusive Books‚ with a 39 to 43% market share of trade books‚ Van Schaik Bookstores‚ which has about half of the academic book market‚ and Afribooks‚ which has cornered learning and teaching support materials.

The study said removing VAT from books needs more research.

“If the gains from increased sales of books are to outweigh the increased administrative burden and loss of tax revenues‚ sales would need to increase significantly.”

The study also found there are widespread allegations of corruption in the industry. The Publishers’ Association of South Africa (Pasa) said in August it is cooperating with an investigation by the Competition Commission into possible cartel behaviour by the local publishing industry.

The commission said it is investigating Pasa and its 91 members for allegedly fixing book prices and trade conditions.

The commission added that an alleged price-fixing arrangement “appears to be historic in the industry‚ dating back as early as [the] 1980s”.

Pasa members include Penguin Random House‚ Jonathan Ball Publishers‚ Juta‚ LAPA Publishers‚ Macmillan South Africa‚ Pan Macmillan‚ NB Publishers and Tafelberg.

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