The Vice-Chairman of EMI, David Munns, has defended his company's stance on record prices and the state of the music industry.

  In his statement, Munns defends his prices by saying, "There's a lot that goes into the retail price - VAT, retailer's cut, distribution costs, advertising and other marketing costs, producers' fees and studio time, not to mention the artists and songwriters who need to be paid."

  On the subject of the Internet and music piracy, he was equally frank. "Whatever any of us feel about the price of anything, that doesn't justify stealing. Illegal file-sharing is theft under copyright law. Is it okay to shoplift if you disagree with the prices a shop charges? Would you steal a Mercedes and justify it by saying it was because you couldn't afford one?"

  In a related story, the day after a report suggested the compact disc is heading the way of the 8-track tape, the world's largest music label conglomerate promised a steep cut in CD pricing.
  Universal Music Group on Wednesday said it will cut its wholesale prices and reduce its suggested retail pricing for CDs to $13, from between $17 and $19. The company, a subsidiary of Vivendi Universal, is home to a number of record labels, including Decca, Deutsche Grammophon, Interscope, Geffen, Island Def Jam, and Philips.

• BBC's story
• c|net's story

  "Music fans will benefit from the price reductions we are announcing today," Jim Urie, president of Universal Music & Video Distribution, said in a statement. "Our new pricing model will enable U.S. retailers to offer music at a much more appealing price point in comparison to other entertainment products. We are confident this pricing approach will drive music fans back into retail stores."

  The cuts follow the release on Tuesday of a report by Forrester Research that predicts the market for CDs will continue to shrink due to consumers' increasing preference for downloading music – both legally and otherwise. CD sales peaked in 1999 and will tumble by nearly one third by 2008, according to the Forrester researchers.

  Consumers should see reduced CD prices as early as October 1, according to UMG.

  Visa Kopu contributed to this article.