Victory for print as ACCC blocks Australia Post price increase

Australia Post had proposed a 5c increase to take effect on 1 January, which would have taken the price of standard letter from 55c to 60c. The proposal came hot on the heels of last September’s 10% hike from 50c to 55c.

The Australian Direct Marketing Association (ADMA) rallied against the “inappropriate” proposals, while Printing Industries called the ACCC’s decision a “victory for commonsense”.

Pat O’Sullivan, general manager, marketing for DM giant Salmat Business Force, said another hike would have been “unbelievable”.

“If Australia Post wants to accelerate the decline of printed mail, they’re going about it in the right way,” he told ProPrint.

O’Sullivan said DM volumes had dropped of significantly after the 2008 price increases. “It just increases people’s move to other forms of delivery.”

He added that Salmat – which last month won a $1.7m contract to supply print and mailing services for the Digital Switchover Campaign – was working closely with Australia Post to promote innovative and creative approaches to DM, such as transpromo and multi-channel options.

ADMA chief executive Rob Edwards said: “An increase to Australia Post’s prices, following so closely on the heels of one this time last year, would have been inappropriate.

“During this time of fledgling economic recovery such an increase would hardly assist industry,” he added.

Hagop Tchamkertenian, national manager for policy and government affairs at Printing Industries, agreed that further price increases would have pushed people away from printed mail.

“Under those circumstances, employment losses would result among the paper-printing-mail house value chain,” he said.

The ACCC has recommended Australia Post look at its cost base, saying that maintaining its existing structure could not be propped up via price increases.

Australia Post released a statement expressing its “disappointment” with the ACCC decision.

“In the past 12 months, our cost-reduction program has removed more than $110m in costs from the business and are continuing to reduce our costs,” said spokesperson Alex Twomey.

“The basic postage rate has not even kept pace with inflation over the last two decades. If it had, the price of the 55c stamp would actually now be 70c,” he added.

 

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