Magazine Distribution

Smith WH PLC
27 November 2000



WH SMITH PLC
STATEMENT RE: MAGAZINE DISTRIBUTION

WHSmith  believes  that Associated Newspapers, in serving  notice  of  its
intention  to  cease using WHSmith News for the distribution  of  a  large
proportion  of its newspapers from the end of May 2001, is acting  without
justification  and  in potential breach of contract.  In  a  letter  dated
Friday  November 24th, Associated Newspapers claims that the  introduction
of  national distribution for magazines by WHSmith will be damaging to the
distribution  of  its newspaper titles.  As a matter of fact  WHSmith  has
taken  no  steps  to  change  the arrangements  for  the  distribution  of
newspapers and has no desire to do so.

In  recent  months WHSmith has sought to improve the existing arrangements
for  the  distribution of magazines in the interest of both retailers  and
consumers. We regard the existing system as inefficient and outdated.  Our
view  is  shared  by the British Retail Consortium, who represent  a  wide
range of retailers including the Association of Convenience Stores, and  a
number of multiple retailers. Furthermore the need for change is supported
by  the majority of independent newsagents* and has even been acknowledged
by  the Periodical Publishers Association (PPA). Our intention to restrict
the changes to magazine distribution has been made clear from the outset.

WHSmith  has been in negotiations with the PPA for several months and  has
tabled   proposals   which  it  believes  would   benefit   all   parties.
Unfortunately  these  talks  have not been  making  the  progress  we  had
expected.  We continue to hope, however, that the PPA will be prepared  to
act to address the concerns of retailers at the inefficiencies created  by
the present publisher-controlled magazine supply chain.

Throughout   the  process  of  negotiation  WHSmith  has  emphasised   its
commitment to independent newsagents, which represent over half of WHSmith
News'  business,  and  has given undertakings to the Newspaper  Publishers
Association  that  we  will maintain the existing industry  structure  for
newspaper distribution.

*  Mori Survey  17th August, 2000

Enquiries to:-

Brunswick Group Limited

Jonathan Glass 020 7404 5959
Philippa Power 020 7404 5959