The mozzarella is beginning to melt in a simmering pizza price war, as the big chains fight for a bigger slice of Australia's $3.5 billion pizza industry.

Leading player Domino's Pizza fired the first shot last month, cutting the price of its value range pizzas to $4.95, a move it describes as "never before seen on the pizza landscape".

Days later, Pizza Hut returned serve, not only matching its rival's $4.95 price tag but also capping the cost of their most expensive pizza at $8.50.

Domino's chief executive Don Meij, a former pizza delivery driver, says the move to cheaper pizzas is a response to customers asking them to extend their promotional prices across the week.

The Brisbane-based company is Australia's largest pizza chain with network sales of $467 million in revenue and 13.4 per cent market share.