Despite claims of price gouging on the cost of magazines, Bermuda's principal distributor of publications has been unprofitable for the past four years.

Magazine Distributors chairman Ward Young said the company lost $170,000 in the last financial year. It might just be profitable this year he said. The company, which holds about 90 percent of the magazine distribution market in Bermuda, has had a 16 percent increase in revenues in the 11 months to December 31.

"It's a tough business to be in,'' he said.

The company was able to increase revenue by cutting costs and increasing magazine sales through putting in better displays at retail outlets to which it distributes publications.

Magazine Distributors is part of a group of affiliated companies held under the BGA Group of Companies, primarily owned by Mr. Young and his family. The group also owns the Phoenix Drug Store, which is a principal sales outlet for magazines and newspapers on the Island.

In recent letters to the editor printed by The Royal Gazette a Phoenix customer complained about the cost of Time Magazine, and the Economist. But as Mr. Ward explained the customer had probably bought the year-end double issue of the magazine.

Phoenix charges $3.35 for the regular weekly issue of the magazine, which sells in the US for $2.95, representing about a 14 percent increase over the published retail price. The Phoenix sells the Economist in Bermuda for $3.95, the same price it costs in the US. The customer had been overcharged by mistake and had been refunded, Mr. Ward said. However other magazines had large price increases over their published retail price. At the Phoenix, Decanter magazine sells for $7.55 -- 27 percent above its published US price.

Computer Shopper sells for $5.99, a increase of 50 percent above its published US price.

Magazine Distributors general manager Vivian Smatt said the price differences reflected the added wharfage, freight, and distribution costs the company had to pay to get magazines on the island. Costs were also incurred when the shipment or air freight of the publications were delayed.

Variations in markups above the published US price also reflected how much of a discount the distributor was able to get from the publisher, she said.

There is no customs duty on magazines and newspapers brought into Bermuda for sale. For example the company paid 80 cents in air freight charges on every newspaper brought from the UK.

"We should be commended instead of scorned,'' she said. "We are giving the best prices we possibly can.'' Magazine Distributors does suggest a retail price to the outlets it supplies, but owners are free to charge whatever they want.

Mr. Ward Young