Mirror board faces sales row

THE board of Mirror Group Newspapers has rejected accusations that it has misjudged the tabloid newspaper market after Daily Mirror sales dropped more sharply than expected in July.

MGN agreed to raise the cover prices of the Mirror and its Scottish sister paper, the Daily Record, from 25p to 27p in the middle of July.

Its main rival, the Sun, held its price at 25p and has attacked the Mirror, through its own editorial and through poster advertising. A slogan, 'Don't go overboard for it,' was coined by an executive in the Sun's promotions department. Robert Maxwell, late publisher of the Mirror, died at sea when he fell from his yacht last November.

The campaign appears to have worked. According to Audit Bureau of Circulation figures, during July the circulation of the Mirror and Record dropped by nearly 40,000 to 3.556 million, while the Sun's dropped by only 14,000 to 3.503 million.

These figures are averaged out through the month, and indicate that the falls for the Mirror and Record may have accelerated after the price rise.

This has brought criticism from shareholders and analysts. 'They seem to have misjudged the market,' one analyst said.

'The timing was odd,' said a media expert linked to one of the groups intending to bid for MGN. 'They raised the price into a weak seasonal market when conventional wisdom is that you increase the price in a strong seasonal market, in the spring or early autumn.'

However MGN is robust in defending the move. Roger Eastoe, the advertising director, said that if the Mirror and Record maintained their circulation lead over the Sun the strategy would be a success.

Charles Wilson, editorial director of MGN, said he thought the price rise had gone very well.

Unoffical figures for the week ending 1 August, which have been challenged by Mr Wilson, indicate that the circulation of the two papers may have dropped below that of the Sun for the first time since March.

The sales of the Mirror are estimated by an industry expert to be 2.76 million and of the Record 700,000, while the Sun has held steady at around 3.5 million.

If the figures are backed up officially it will be embarrassing for the MGN board, which faced a great deal of criticism for its connections with Maxwell at last month's annual shareholders' meeting.

MGN shares eased 3p to 70p yesterday.