Audit Notes: Beer Buys Off the ‘Burg?, Apple As Bully, Bank Propaganda

This New York Times story, which reports that residents of Brooklyn’s Williamsburg protested a Duane Reade chain store coming into the neighborhood and threatening the mom and pops there, just isn’t coherent.

When Duane Reade opened a new store a few months ago in Brooklyn, it faced opposition from residents loyal to a local pharmacy. So it decided to include something in the store that the neighborhood did not have: a bar that specializes in beer.

It’s been a few years since I lived there, but I can report that it’s false that the neighborhood doesn’t have a “bar that specializes in beer,” which is sort of like saying Manhattan doesn’t have a “Ray’s that specializes in pizza.” Head a few blocks east to Spuyten Duyvil, for one. The New York Observer is all over that angle.

But more broadly, the story’s thesis just doesn’t make sense. What, did the Brooklyners protesting its presence suddenly see the beer and withdraw their complaints? And doesn’t the addition of beer mean Duane Reade not only threatens the local King’s Pharmacy but also the bodegas?

So the lede, instead, should be something like this:

When Duane Reade opened a new store a few months ago in Brooklyn, it faced opposition from residents loyal to a local pharmacy. But it decided to open it anyway, and include beer.

And just as an aside, it really sucks that the chains are taking over another New York neighborhood now. One of the reasons I moved to that area seven years ago was because it had mom and pop stores and chains were very few and far between. Here’s hoping Duane Reade, Starbucks, et al fall flat on their faces.

— Apple is refusing to allow European newspapers to give free access to iPad apps to their print subscribers, a move that happens to cut out Apple’s whopping 30 percent cut of all sales.

First of all, that 30 percent cut is way, way too high, especially for subscriptions that have recurring payments. It verges on obscene for a $320 billion company to gouge people like that. Apple make plenty of money off hardware and their own software sales.

But it’s yet more reason for the press to refuse to go along with the Steve Jobs control-freak show. Time’s running out, though. The media companies are losing whatever leverage they had to negotiate terms for being on the iPad. Soon they’ll need the iPad more than the iPad needs them.

The Washington Post is good to keep an eye on “The Influence Industry,” as it calls it, which is now trying to roll back debit-card rules via the new Republican majority in the House. They’ve got the propaganda out, too, calling the regulation “price-fixing”:

The proposed cap has been hailed by consumer groups and major retailers as a necessary curb on the interchange fees, which are set by card processors such as Visa and MasterCard and paid to banks by retailers.

But the lower fees are strongly opposed by banks and credit-card firms, which argue that they will be forced to make up for the lost revenue by charging consumers in other ways. The American Bankers Association and other business groups are lobbying lawmakers and regulators to reconsider the policy.

“We oppose price fixing just in principle, and that’s what this is,” said ABA executive vice president Floyd Stoner. “Congress does address things and go back and look at things in a lot of arenas. We believe it can happen here.”

Sounds like somebody’s been talking to Frank Luntz. But it’s not price-fixing. It’s preventing price-gouging by a monopoly.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,