The acquisition of Text Publishing by Penguin Random House is part of a worrying trend in Australian publishing

Australia has been unique in the anglosphere for decades, as its independent publishers have resisted the forces of conglomeration and remained privately owned – often by their founders. But this week the third independent publisher in less than six months has merged with a multinational.

Text Publishing, founded in 1990 by Eric Beecher and Di Gribble, and run for decades by Michael Heyward and Penny Hueston, is now an imprint of Penguin Random House Australia.

Text joins Pantera Press, which was acquired by Hardie Grant in September 2024, and Affirm Press, which described its acquisition by publishing giant Simon & Schuster in August 2024 as “plugging into” the company’s “vast operational scale”.

Doubtless, each of these mergers would have been the product of individual decisions and negotiations, but to see the third independent publisher making this move in a such a short period points to an emerging pattern.

A substantial legacy

Text Publishing has built up a substantial reputation. It has championed established writers, such as Helen Garner and Michelle de Kretser, and published the debuts of Jennifer Down and Clare Wright, who went on to win the Miles Franklin Literary Award and the Stella Prize respectively.

Text also publishes an extensive series of Australian classics. These titles are often previously out-of-print books, saved from obscurity. With a relatively small population and limited interest from overseas publishers in local titles, Australia’s literary heritage is at great risk of disappearing without the efforts of publishers such as Text.

Unusually in Australian publishing, the company has also invested in translations. It brought award-winning Taiwanese author Wu Ming-Yi’s novel The Stolen Bicycle to English readers. Hueston’s translations of Marie Darrieussecq and Nobel Prize-winner Patrick Modiano have attracted international acclaim.

Australian publishers have long subsidised their operations by selling local editions of international bestsellers, such as Barack Obama’s Dreams of My Father. Text’s early acquisition and fervent support of Elena Ferrante’s bestselling Neapolitan Quartet generated significant revenue for the company.

Independence and literary culture

Mergers are not a new phenomenon in Australian publishing. Indeed, this is not the first time that a publisher co-founded by Di Gribble has joined Penguin. McPhee Gribble – the first home of Tim Winton and Helen Garner – was acquired by Penguin in 1989.

In the press release, Heyward describes the agreement with Penguin Random House as guaranteeing Text will “retain full publishing control as we continue our work of acquiring, editing, curating, designing, marketing, publicising and selling rights in our books”.

But history shows that mergers often result in the dissolution of the smaller imprint. To take just one example, Penguin no longer publishes books under the McPhee Gribble imprint. It is precisely the question of which readerships the merged version of Text will cater to that will worry Australian readers and supporters of independent publishing.

Literary prize lists are regularly dominated by books from independent publishers. These houses also have a better track record of publishing authors from diverse backgrounds. Often literary authors will start with a small press, which supports their development, then move to a larger house once their audience reaches a critical mass.

Troubling industry insiders further is the effect of mergers on booksellers. Unlike the US and UK, Australia’s independent book retailing sector has largely weathered the consecutive shocks of ebooks, Amazon and COVID-19.

As I have argued elsewhere, the symbiotic relationship between independent booksellers and publishers is one of the forcefields shielding Australian publishing from the pressures affecting its international counterparts.

History shows publishing mergers often result in the dissolution of the smaller imprint.
T. Schneider/Shutterstock

Commercial pressures

Rising costs, declining sales and the drive for major corporations to maintain growth offer some explanation for mergers. How many jobs are cut and how the industry changes shape will only become clear with time.

There is one interpretation of this development that is potentially positive for local authors. Prior to its acquisition, Text Publishing, though an independent company, was renting warehouse space and using the sales force of Penguin Random House. This meant a significant portion of the recommended retail price for each book would have been swallowed before the publisher could start recording profits.

The benefits of verticalisation – in other words, one company controlling various aspects of the distribution process – might mean Text will have more margin to play with when determining whether or not to acquire a book.

Such a scenario is unlikely, however, since Penguin Random House is part of a publicly listed company, answerable to shareholders. Though there is an agreement about editorial independence, the business will necessarily be part of the broader strategies and decisions of Penguin Random House and its parent company, Bertelsmann.

Having resisted the temptations of conglomeration for so long, why is it that three publishers have acquiesced in quick succession? The answer may well be profit margins.

Recommended retail prices for books have been largely steady for 20 years. They have not reflected the rising costs of raw materials and logistics. The price of paper has grown significantly in recent years. In conjunction with increased costs throughout the supply chain, this has meant printing and shipping books is far more expensive than before COVID-19.

Compounding these concerns is feedback from booksellers, who are tracking their customers’ purchasing habits, some noting a downward trend during a cost of living crisis.

A further burden was the major shock in the book retail sector when Australian online retailer Booktopia went into administration last year. Although Booktopia is currently operating under new ownership, its position in the market has not returned to former levels.

There remain several privately owned and run publishers in Australia, including Allen & Unwin – which is by far the largest independent publisher in the country – and numerous small presses, such as NewSouth, University of Queensland Press, Scribe, Black Inc., Giramondo and Upswell.

What will worry authors and readers alike is the potential for more conglomeration, leading to greater homogenisation and an impoverished choice of local titles on offer. Barriers to entry for new publishers, including limited options for distribution and high production costs, may preclude the emergence of new players. If the trend continues, there will be more losses for local and international readers.

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