A court battle between an Irving-owned newspaper and one of its former publishers has shed light on the efforts of a small flyer distribution company trying to get off the ground in Bathurst, N.B.
Gary Winsor has been publishing Infosac sporadicallysince August but he says he has found it hard to compete with loweradvertising ratesoffered by Irving-owned NB Distributors Co. Ltd.
"It started out quite well, but then in the past couple weeks, it's been getting a lot more difficult," Winsor told CBC News.
Infosac creates weekly four-page flyers of local advertisements but Winsor said his company is losing advertisers as they switch to the Irving-owned competition because of discounts it offers.
A full-page of advertising costs between $800 and $1,200 with Infosac.
"Now I've heard stories of $375 a page [with NB Distributors] so it's very difficult to compete with that," said Winsor.
CBC News spoke with eight companies in Bathurst that advertise with Winsor or NB Distributors.
Six of them had placed ads with Winsor and told CBC News they had been offered discounted rates of between 30 and 50 per cent and free advertisingto switch to NB Distributors.
The two other companies said they had never been offered any special deals to continue advertising with NB Distributors.
It seems like the competition is slashing rates to lure customers away, said Winsor.
"I'm disappointed that such a large organization would use such tactics to protect or make sure that no one else enters into that particular marketplace," he said.
Tamra Alexander, a law professor at theUniversity of New Brunswick, said Winsor could take his case to the federal competition tribunal to have NB Distributors' pricing practices investigated.
"They would look to see whether or not the party has market power, which they are abusing in a way that substantially lessens competition," Alexander said.
Winsor's company was named in court documents connected to a lawsuit launched by Irving-owned Brunswick News Inc. against a former publisher in its chain.
William Kenneth Langdon quit his job as publisher of the Woodstock Bugle-Observer in September.
According to an affidavit Langdon has filed in court, his resignation was connected to disillusionment with company management practices that included orders from Brunswick News' vice-president Victor Mlodecki to drive competitors out of business.
In the court documents, Langdon saidBrunswick News is targeting Winsor in Bathurst and Lavaseure Distributors in Edmundston.
"In addition to my personal objections, I am also not comfortable from a professional perspective with the manner in which we are being directed by Mr. Mlodecki to carry out business, particularly as it pertains to our competitors," stated Langdon's letter of resignation, which was filed in court with his affidavit.
Mlodecki said he would be prepared to spend up to $1 million to put Winsor out of business, states Langdon's paperwork.
Brunswick News and Langdon are in a court battle regarding Brunswick's News' bid for a courtorder to prevent Langdon from approaching Bugle-Observer customers, advertisers and employees.
Langdon is trying to start a new newspaper in the community of Woodstock.
The Carleton Free Press opened its new office on Tuesday and is expected to launch its first publication in November.
A court date has set for Oct.19.
CBC News has repeatedly contacted Irving representatives for comments on theiradvertising pricing. They have declined to comment.
Mlodecki has issued a statement on behalf of Brunswick News statingit welcomes competition in the newspaper business.
He alsorepeated allegations contained in a previously filed court documentindicating Langdon removed confidential and proprietary documents before he resigned from his job and informed the company of his intentions to start a newspaper.