In an example of unmitigated arrogance, Australian Bookseller Angus & Robertson has demanded cash payments from small publishers and distributors who want A&R to continue to carry their books. The actual letter from A&R, along with a reply from Tower Books director Michael Rakusin, can be seen here, and really must be seen to be believed. Very slightly more of A&R's angle is provided here. (Thanks to MDD for bringing this to my attention.)
The most striking aspect of this situation, is that A&R's demand is based solely on its own profitability targets—the products of certain suppliers are not meeting A&R's internal profitability targets for the supplier's product line, and the company is asking the suppliers to make up the difference in cash. (Once again, the response letter from Michael Rakusin highlights the A&R operations issues that have likely contributed to lower-than-desired profitability.) While I can imagine some misguided MBA imagining that they are doing the suppliers a favor by offering them the opportunity to continue to do business with a major retail outlet, this letter makes no business sense whatsoever. If you find that a particular supplier's product is underperforming, you either negotiate for a better price in the future, or you end the relationship. Asking for cash payments to make up for your own business failures is ludicrous, and given A&R's market share (20% of the Australian market, according to The Brisbane Times), is tantamount to extortion.
I've complained about the coercive pressures exerted by market giants like Wal-Mart before, but this really crosses an entirely new line, in an entirely new way.