Australia Post advised the mailing industry earlier this month that it was instituting a price rise from July 6, lifting rates by 3.9% for parcels, 3.6% for Print Post and 3.1% for line-haul charges.
D&D Mailing Services director David Docherty claims this essentially represents a 4.6% “price hike” for publishers posting magazines.
Publishers Australia last Friday held “a spirited face to face meeting” with Australia Post, according to Sarkissian, although it was unsuccessful in deterring the company from increasing its rates. Many in the industry are now considering asking the ACCC, Ombudsman and Federal Government to intervene.
Jeremy Vaughan, managing director of Haymarket Australia (publisher of ProPrint), claimed the hike will ultimately lead to many titles turning their backs on print altogether, as well as forcing further job cuts in the publishing world.
“All publishers across all sectors are tightening their cost belts so this cost hike is going to have a material effect, especially on the smaller marginal titles that are already hanging on by a thread,” said Vaughan. “This action from Australia Post is going to accelerate the niche business-to-business publishers’ online strategy, so Australia Post’s increase is actually triggering the demise of print in some sectors. In the consumer sector it would be a brave publisher to hike the subscription price at the moment so publishers would have no other alternative but to look at further staff costs to cover this increase.
“It does seem very bizarre that when the majority of businesses are pulling together in this climate that Australia Post announces an increase. This is not just about publishing, it’s about the whole industry and that includes print – this action to drive up costs will result in fewer magazines in the post and thus fewer magazines on the printing press.
“What it shows is that Australia Post is prepared to inflict material damage by sending a torpedo into the bows of the industry that is suffering its worst revenue decline in the industry’s history.”
Indeed, the price hike has drawn a barrage of criticism from the publishing sector over the last few weeks. In a letter to Australia Post group manager of letters Allan Robinson, Docherty outlined how his clients are not only angry about being hit with a price hike during an economic crisis, but also Australia Post’s decision to bring forward the increase two months ahead of its traditional schedule.
“This increase is only 9 months from the last increase,” he wrote. “Therefore the increase at this time (three months earlier) means a further 33% increase to Australia Post profits and an unbudgeted and unplanned impost to customers as it hits one financial quarter earlier than previous years which effectively has an underlying annual increase of a further 1% increase than advised.
“At a time where our Prime Minister has warned of hard times and called upon businesses within Australia to pull together to see our nation through these hard times, here we have a corporation which has effectively ignored the requests of the government and moved to not only increase rates but to provide little or no advance notice.”
“Unfortunately we don’t have the option of being able to shop around for other suppliers of national distribution in an endeavour to maintain costs. We are at the hands of Australia Post and the decisions that they make about their own internal costs and requirements with what appears to be without regard to the industries they serve.”
“I ask that you reviews these increase [sic] with a view to withdrawing, decreasing and/or deferring them to a later date.”
Australia Post spokesperson Jo Willoughby has since issued a statement addressing the controversy.
“Whilst understanding the sentiment being expressed by individual publishers and indeed collectively through the voice of Publishers Australia, Australia Post has also been hit with real cost pressures associated with the current economic climate,” she said.
“Australia Post empathises with the sentiment of the industry and as such, when considering the price increases for Print Post, Australia Post has shown restraint by not passing on the full impact of direct cost pressures it has realised.”
“Australia Post is committed to stimulating and growing the publishing industry and currently has various programs in development to create further value to the Print Post product and the broader publishing industry.”
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