November 20, 1998 Fact Sheet Facts about Barnes & Noble�s Proposed Acquisition of Ingram Book Company On Friday, November 6, Barnes & Noble, Inc., announced its intention to purchase the Ingram Book Company. Independent booksellers view this as a blatantly anticompetitive combination, which must be reviewed and ultimately rejected by either the Federal Trade Commission or the Department of Justice. The Facts: Barnes & Noble, a $3 billion company, is the largest book retailer in the US. Ingram Book Company, a $1.4 billion company, is the largest book wholesaler in the US. Barnes & Noble is the largest single competitor of independent bookstores in the US. Ingram Book Company is the largest single supplier of books to independent bookstores in the US, and has by far the largest inventory of any wholesaler, and is often less expensive for independent booksellers to deal with. If Barnes & Noble is allowed to purchase Ingram, other retail booksellers will be forced to purchase their books from their single largest competitor, unless they change to smaller or regional wholesalers. It�s as if Texaco and Shell were forced to buy their gasoline from Exxon. If Barnes & Noble is allowed to purchase Ingram, it will have access to confidential sales and customer data from virtually every one of its competitors. It�s as if Coca-Cola were forced to give its secret formula for Coke to Pepsi. If Barnes & Noble is allowed to purchase Ingram, it will have strong temptations to mix retail and wholesale purchases, putting independent bookstores at a serious competitive disadvantage. The ever growing concentration of power in the book industry � the merging of publishers, publishers� equity in online retail ventures, and the proposed acquisition of a giant wholesaler by a giant retailer � places the critical decisions as to what books are widely available to the American public in fewer and fewer hands. The net result is a dumbing down of the culture as the focus shifts to celebrity biographies, true crime, and "instant books." The American Booksellers Association represents nearly 3,400 bookstore businesses with over 4,000 locations. Our members employ an average 19 persons per business, or nearly 65,000 people, and account for 17 percent of book purchases made in the US. Earlier this year, the American Booksellers Association and 26 independent bookstore co-plaintiffs filed a major antitrust lawsuit against Barnes & Noble and Borders, alleging that the two chains use their dominance in the market to bully publishers into giving them secret and illegal terms of sale that put independents at a competitive disadvantage. That suit is pending in federal court in California. Additionally, the ABA won consent decrees from six publishers and a $25 million settlement from Penguin USA as the result of similar suits brought in 1994 and 1996. As Ingram is the largest single supplier of books to independent bookstores, many of those stores enjoy a credit line with Ingram that they do not enjoy with other book wholesalers. Should that credit line be threatened in any way, the availability of books to those stores will be diminished. As locally owned, independent businesses are threatened and ultimately forced out of business by mergers and acquisitions like the one proposed by Barnes & Noble, American towns are losing their identity as one Main Street is starting to look eerily similar to every other Main Street. Chain stores dominate the landscape, taking taxes and revenue out of towns to pay tithe to the corporate office in New York or elsewhere. Topics: B&N/Ingram,