'Sun' raises the heat with a 5p price cut

THE Sun newspaper yesterday fired the first shot in what could be a summer circulation battle, cutting its price by 5p to 20p.

Its rival the Daily Mirror, which costs 27p, said last night that it will sell at 10p for today only.

Kelvin MacKenzie, editor of the Sun, said that the move was a 'recession-beater'. He said: 'We believe the recession is going to go on a lot longer and our readers are being hit.'

The move makes The Sun 7p cheaper than the Daily Mirror, and 10p cheaper than the Daily Mail and the Daily Express. Today costs 25p, as does the Daily Star.

Brian Hitchen, editor of the Daily Star, dismissed the Sun's move as 'desperate measures from desperate men'. He said: 'Even at 20p the old- fashioned Sun could hardly be described as a bargain. It is 10 years out of date.'

The Daily Mirror's editor, David Banks, said his paper's 10p offer today would give people a chance to try a 'decent' newspaper.

The timing of the Sun's move is clearly dictated by the plan of the administrators of Robert Maxwell's estate to sell off his majority shareholding in the Daily Mirror in September. At the moment the Mirror, trying to maximise its share price in advance of the sale, is in a weak position to engage in a price war with the powerful Murdoch organisation.

Mr Banks confirmed last night that the price of his paper would return to 27p. If this hits sales substantially, the share flotation could be delayed.

The industry view of price cuts on tabloid papers is that the circulation advantage seldom compensates for the loss of revenue. For tabloids, the cover price is a much more important contributor to profits than on broadsheet papers, where advertising revenue is the decisive ingredient.

Although the Sun made a healthy profit at 25p, industry sources said last night that it could scarcely hope to do more than break even at 20p, even if its sales went up by 100,000.

However, the Sun increased its circulation lead over the Mirror by staying at 25p when the Mirror went up to 27p last year. The new price cut, with its attendant publicity, will make the gap larger.

Sir Frank Rogers, deputy chairman of the Daily Telegraph and a former managing director of the Daily Mirror, said last night: 'This will definitely mean a loss of sales for the Mirror.'