Australian Booksellers Association Wary Of Pearson REDGroup Deal

A day after Pearson (NYSE: PSO) Australia announced plans to buy REDGroup’s online business–including Borders Australia‘s website and the website of bookstore chain Angus & Robertson–the Australian Booksellers Association has asked the Australian Competition and Consumer Commission to launch an investigation into the deal.

The Australian Booksellers Association is concerned that the deal would provide Pearson-owned publisher Penguin with a monopoly over the supply chain and that other publishers would face difficulty entering the e-book market, which is still in the early stages in Australia.

The action comes despite promises that the online business will be run separately from the publishing side. “Penguin won’t be favored,” Penguin Australia group COO Dionne Higgins told The Canberra Times. “They will be transacting with this business in the same way as any other publisher. We’ll sell across all publishers, so the range will be extensive.”

Meanwhile, REDGroup administrators Ferrier Hodgson announced that two of the Angus & Robertson stores owned by REDGroup Retail have been sold, and the remaining 16 will close by the end of this month, Australian book trade publication Bookseller+Publisher reports.

REDGroup entered voluntary administration in February, just a day after Borders Group in the U.S. declared bankruptcy. Borders Australia is unaffiliated with Borders in the U.S., but the bookstore chains’ troubles reflected the challenges faced by brick-and-mortar bookstores in both countries. Since February, most of the 206 Borders, Angus & Robertson, and Whitcoulls stores in Australia and New Zealand have closed, although 48 A&R franchise stores remain open.