Desmond’s newspaper group has decided it will remunerate retailers of the Daily Star on the basis of a standard cover price of 20p across the UK, rather than the current 25p.
This means that multiple and independent retailers’ margins will be reduced by an extra 1.21p for every copy of the paper sold The tabloid has a circulation of around 820,000 in the UK.
Retailers will now make just 4.84p per copy, following on from a cut from 8.47p to 6.05p in November last year.
The move follows the Daily Star's price promotion across the country, which began when it cut the cover price in November 2008 from 35p to 25p, and then down to 20p this year.
Retailers had thought their price margins would be protected, as the cut to 20p was to be for a promotional period.
Rival newspaper group, News International, hit retailers with a similar cut on the margins of The Sun in December last year.
As a comparison, the 45p Daily Mirror currently offers retailers 10.71p on copies sold, while The Sun, which is price discounted to 20p in some parts of the country, offers retailers 6.96p.
The move, which has been condemned by the National Federation of Retail Newsagents (NFRN), comes ahead of Desmond's expected halving of the Daily Star cover price from 20p to 10p in July.
The NFRN said: "The Daily Star could now have made a fatal mistake in providing a margin for retailers that, in economic terms, no longer justifies its place on retailers’ shelves in all but a few stores that have exceptionally high sales."
One source said that some retailers had been "cover sticking" to 25p in order to protect their margins.
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