The National Federation of Retail Newsagents (NFRN) has challenged the Office of Fair Trading (OFT) decision not to allow retailers to set their own prices for newspapers, and repeated its call for the OFT to refer the news trade to the Competition Commission for a full investigation.

Last year the OFT said it believed consumers would be better protected if the price of newspapers was set by publishers. But, the NFRN says, newspaper cover prices have increased by more than double the Retail Price Index (RPI) in the past 12 months.

Trade relations manager David Daniel said: "Publishers have increased cover prices simply to make up for the loss of advertising revenue. Have consumers benefited from this? Of course not.

"Not only are consumers having to pay more for those newspapers, but in many cases they are getting thinner newspapers due to less advertising. These publisher price increases have undoubtedly contributed to the further decline in newspaper sales, which causes suffering across the entire industry."

Daniel added that the OFT had failed to investigate fully the impact of fixed cover prices, including the margins earned by wholesalers, the effect of carriage charges, and denial of retailers' ability to control their profitability.

"We are not suggesting that printed cover pricing should necessarily cease, but strongly arguing that the combined effects of publisher price control, publisher margin control, no choice of wholesale supplier and non-negotiated carriage charges, are in serious need of investigation," he said.

The NFRN is joined by other trade bodies including the Association of News Retailing and former wholesaler Dawson News, in calling for a Competition Commission investigation of the news distribution market.