Tax reform and the Cortez Law mobilize attention in the publishing sector

The Brazilian publishing sector is working this year on two themes that are relevant to the activity in the long term, he told Brazil Agency the president of the National Union of Book Publishers (Snel), Dante Cid. One of the issues is tax reform, and the objective is to avoid taxes on books and to maintain the book’s tax immunity.

“Otherwise, if there is any incidence of taxes, then the scenario will be very critical”, assured Cid.

The Cortez Law, which regulates the maximum price variation in the first year of launching book titles, is another important issue. According to Dante Cid, this can guarantee greater “bibliodiversity”, so that small bookstores can flourish not only in big cities but, mainly, in the interior, “where they are sorely needed”, in conditions to compete with online platforms, which have lowest cost chain.

Senator Teresa Leitão (PT-PE) managed to unarchive the bill (PL) 49/2015, which creates the Cortez Law, to encourage the publishing and bookseller market. The proposal seeks to ensure equality of conditions for bookselling entrepreneurs, an offer accessible to the general public to encourage reading, free competition, consumer protection and combating the abuse of economic power.

According to the president of Snel, the year 2023 presents no real growth, but neither is there a very significant decline. “We therefore have positive expectations that, at least, there will be no decline (in 2023)”.

Balance

Last year, publishers earned R$ 4.1 billion in sales to the market, with a drop of 3% compared to 2021. Considering the historical series since 2006, the accumulated decrease reached 40% in real terms, that is, discounting the inflation. The numbers are from the survey Production and Sales of the Brazilian Editorial Sector, coordinated by Snel and the Brazilian Book Chamber (CBL), with verification by Nielsen BookData.

Dante Cid recalled that 2022 started very well. “Expectations were excellent, driven by the textbook segment, with the return to face-to-face classes.” In the second half, high inflation began to have an impact on sales, showing, once again, that the negative macroeconomic scenario has an immediate direct impact on books. According to Cid, a positive neutral scenario “does not necessarily increase sales, but the negative scenario always makes them fall”. The increase in inflation, combined with the loss of consumer purchasing power, was responsible for the marked drop.

Of the four segments of the book sector – General, Didactic, Religious and CTP (Scientific, Technical and Professional Works), sales to the market expanded in real terms in the first half of 2022 for the segments of textbooks and religious books (+0. 02% each). In the second half, all segments were impacted, and the largest volume of problems was in the CTP. Sales in the general works segment fell 0.01%, and CTP recorded the most significant drop last year, 14.8%, the lowest level in 17 years.

E-books

The Digital Content Survey of the Brazilian Publishing Sector shows, for the first time, the accumulated sales revenue of publishers in this segment in four years, when the survey was started. Adding the categories A la Carte and Other Categories, real growth in sales revenue from publishers was 95% in the four-year period.

In 2022, digital products accounted for 6% of publishers’ revenues in real terms.

A categoria A la Carte refers to the sale of an entire unit of e-book or audiobook. Other Categories groups in a single segment of the survey the forms of commercialization of Virtual Libraries, Subscriptions, Online Courses and Educational Platforms, which also started to be considered from 2022 onwards.