Pressure for inquiry on newspaper prices
Sunday 26 June 1994
Peter Bottomley MP, vice- chairman of the Conservative back-bench Media Committee, joined Shadow Industry Secretary Robin Cook and Matthew Taylor, Liberal Democrats' chairman of campaigns, in the call to OFT Director-General Sir Bryan Carsberg to rule on the broadsheet price-cutting that has prompted fears of newspaper closures.
Labour is also proposing an inquiry by the Commons Select Committee on Trade and Industry into newspaper pricing, competition and subsidy, with a 'quickie' report before parliament goes into recess next month.
Mr Cook said the News International price war was clearly aimed at driving competitors out of business, and he urged Sir Bryan to investigate. 'He (Murdoch) is able to cut prices only because of his profits from other interests. We are now faced with blatant predatory pricing.'
Mr Taylor, MP for Truro, added: 'There is an urgent need for the OFT to step in before the choice of quality newspapers in this country is cut to those in the hands of media magnates.'
Mr Bottomley, MP for Eltham, said:'Sir Brian said previously that there was a fine line which he did not then think had been crossed. If he looks again, I think he will notice that it has been.
'It is not for me to say which newspapers should live or die, but I do believe that people in parliament shoud try to make sure that the usual rules apply. Some would say that for too long some individuals have had their own way, breaking every rule under the sun.'
Subsidies on the scale required to sell the Times for 20p per copy threatened 'the destruction of the British newspaper industry as we know it'. A three-week inquiry by the OFT would establish whether there was any commercial logic in the price-cutting 'other than driving the competition from the market place'.
Mr Taylor said: 'It looks like a deliberate policy to force competitors out of the market - which cannot be good for democracy.
'If nobody else will act, the Government must. Having allowed Murdoch to take over the greater part of the British print media, they cannot allow him to close down the rest.'
News International cut the price of the Times from 50p to 30p last September, increasing sales by 28 per cent. Last
Thursday, the price was cut again to 20p after the Daily Telegraph slashed its price to 30p. Both groups are also operating cut-price offers on weekend titles.
When the price wars began last autumn, Mr Cook raised the issue with the OFT, and Sir Bryan said that a line could be drawn between vigorous competition and predatory price competition. He ruled that the competition was fair.
Labour also intends to pursue the controversy through the Commons Trade and Industry Select Committee. Derek Fatchett MP, Opposition spokesman on industry, said: 'This is a matter of profound importance to our democracy.
'It will be extremely useful if the DTI Select Committee could undertake a quick report on newspaper pricing, competition and subsidy. We should look at the issue of cross-
subsidy from one part of an organisation to another, especially when one part is clearly not a newspaper activity. Profits have been used to subsidise a no- profit making newspaper.'
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