Price rises signal thaw in newspaper `cold war'

Fleet Street's long-lived cover- price war showed further signs of abating over the holiday weekend, as the Daily Mail unveiled hikes both south and north of the border and the Guardian increased its Saturday price to 60p from 50p, writes Mathew Horsman.

Industry analysts said the thaw in the ``cold war'' among newspaper publishers was an indication of the damage down by higher newsprint prices and intense pricing competition.

From Christmas Eve, the Daily Mail's Saturday edition rises to 40p from 35p, while the Scottish Mail increases 5p to 30p on Saturday and to 25p from 20p in the week.

The Guardian's decision to raise Saturday prices reflected a growing industry consensus that readers are altering their weekend reading habits, and are prepared to view the Saturday edition as a premium product.

The Scottish market has seen intense price competition, with the Mail, published by Sir David English's Associated Newspapers, selling until this week at only 20p in the week. South of the border, Sir David believes prices could be kept higher without jeopardising circulation.

News International's flagship tabloid, the Sun, has been selling for 25p, but has occasionally been discounted to just 10p for a single day. Anyone buying the Saturday issue of the Sun in Scotland can get the News of the World for just 10p on Sunday.

According to Scottish publishing executives, the market north of the border has been viewed as quite distinct by national publishers, and price- cutting has been used by most titles to gain market share. Even those titles which have held out, such as the Daily Record, have used expensive promotional campaigns. The Daily Record is published by the Mirror Group, which owns 43 per cent of the Independent.

Kevin Beattie, managing director of the Daily Record and Sunday Mail, said: "Price has certainly been used to generate sales in Scotland. But with newsprint costs increasing, publishers have had to reconsider."

Newsprint prices have risen by between 40 and 50 per cent for most publishers since the beginning of 1995, and a further hike of perhaps 10 per cent is expected in January.

However, publishers report a willingness among newsprint suppliers to agree contracts of more than six months - a sign, they say, of improvement in the tight market.

Indications that the current cover-price war might be ending came last month, when News International, Rupert Murdoch's UK publisher, raised the price of the Times to 30p from 25p.

One senior newspaper executive said: "That was proof that even Murdoch is not immune to effects of higher newsprint costs." However, other publishers expect Mr Murdoch, who launched the price war in the summer of 1993, to return to price-cutting in 1996. The war has led to sharply lower profits at many newspapers, including those in Mr Murdoch's stable. But his success in increasing the circulation of the Times to more than 600,000 proved to many in the industry that newspaper buyers were, after all, sensitive to price.