Agora has reported that following entry of Axel Springer’s new daily ‘Dziennik’, decided to lower the copy price of ‘Gazeta Wyborcza’ to PLN 1.5 (from PLN 2.8 at present) effective from tomorrow (Friday, April 14). The decision was made to enable the reader to make a choice purely on product quality basis regardless of financial considerations. According to Agora’s statement, Axel Springer started an aggressive price war, probably being afraid that the German format might be difficult to implement on the Polish market. Agora views this sales strategy as an attack on the whole segment of broadsheets in Poland. The company indicated that this decision might have a significant influence on Gazeta Wyborcza copy sales revenues.
We view Agora’s decision as rather nervous and desperate, however in line with company’s strategy of defending Gazeta Wyborcza copy sales to retain dominant position on the advertising market. In our opinion this would influence not only Agora’s short term results but also mid term figures as it could be difficult to return to previous copy price. We believe that the news should have a strongly negative trading impact. The analysts’ conference is scheduled for next Wednesday, April 19.