Protests against newspaper price cuts rejected

THE price war in Britain's daily newspaper market looked set to continue yesterday after the Office of Fair Trading ruled that price reductions by the Times and the Daily Telegraph did not constitute predatory pricing.

Sir Bryan Carsberg, director- general of the OFT, said that his inquiry into the price cuts had not established a case for formal action under the competition legislation. The inquiry centred on allegations that the price cuts were predatory and intended to drive competitors out of the market. It followed a complaint from Newspaper Publishing, publisher of the Independent, and protests by Labour MPs.

Ian Hargreaves, editor of the Independent, said: 'I think Sir Bryan is wrong but we must accept his verdict, reached after only an informal inquiry. The Independent, in spite of the difficulties caused by Mr (Rupert) Murdoch's price war, will continue its recovery.

'It is to be hoped that the Government will take a more robust view of Mr Murdoch's excessive power in Britain's media industry in the cross-media ownership review, currently in train.'

News International, publisher of the Times, claimed the OFT ruling was 'a victory for common sense'. It said its current price strategy was a long-term one, though it was constantly under review.

Max Hastings, editor-in-chief of the Daily Telegraph, said: 'I never expected the OFT would arrive at any different conclusion. Mr Murdoch decided to use his huge resources and accept colossal losses on the Times in order to improve that newspaper's position. We shall simply wait patiently for Mr Murdoch to grow bored with his huge losses on the Times.'

Sir Bryan's view was that the price reductions have had wide- ranging effects on other newspapers, national broadsheets, mid- market titles and regional newspapers, and did not appear not to be aimed at any particular title.

The Times began the battle by cutting its price from 45p to 30p last September. In June this year the Daily Telegraph cut its price from 48p to 30p, provoking a further reduction by the Times to 20p. The Independent reduced its price to 30p.

Most recent figures show that the Times has increased its daily sale from about 360,000 to 607,000 since the price war began. The Daily Telegraph's current circulation is 1.1 million.

The Independent has increased to 290,000 since August.

Two months ago News International revealed that the price war had cost the company pounds 45m in lost profits. The Telegraph's price cut caused a precipitous fall in the company's share price, though it has since been recovering.