ACCC proposes not to oppose prices for new Australia Post service

The Australian Competition and Consumer Commission today issued its preliminary view not to oppose the prices proposed for a new service to be introduced by Australia Post.  The ACCC now calls for submissions on this view. 

The proposed new service is called Impact Mail and will allow the postage of bulk quantities of irregular shaped (non-rectangular) direct marketing mail.

An ACCC Commissioner, John Martin, said Australia Post is required to lodge a price notification under Section 95Z(5) of the Trade Practices Act 1974 because the Impact Mail service falls within the definition of Australia Post's reserved services. 

"Reserved postal services are declared under Part VIIA of the Trade Practices Act", he said.  “This means Australia Post must notify the ACCC before it can introduce the Impact Mail service. The ACCC is responsible for assessing the proposed price to determine whether it is appropriate.

"The ACCC reached its preliminary view after considering information provided by Australia Post and submissions from interested parties.

"The ACCC's preliminary view is to not object to the proposed prices, but interested parties have another opportunity to comment before the ACCC makes a final decision".

Submissions should be made by 5 p.m. Thursday 23 September 2004 to

Once any additional submissions have been considered, and a formal price notification lodged by Australia Post, the ACCC will issue its final view.

Background

Under the Australia Postal Corporation Act 1989, certain postal services are "reserved" to Australia Post, meaning that Australia Post has the exclusive right to provide these services. These "reserved services" are declared under Part VIIA of the Trade Practices Act 1974.

This means Australia Post must notify the ACCC if it proposes to increase the price of a reserved service, or if it proposes to introduce a new service that falls within the definition of reserved services, or if it proposes to provide an existing reserved service under terms and conditions that are not the same or substantially similar to the existing terms and conditions of that service.

The object of the prices surveillance provisions (Part VIIA of the Trade Practices Act) is to have prices surveillance applied in markets where the Minister considers that competitive pressures are not sufficient to achieve efficient prices and protect consumers.

The ACCC must review these price notifications and take such action, in accordance with Part VIIA, as it considers appropriate. After consideration of a notification, the ACCC may do one of three things:

• it may serve a notice stating it has no objection to the person supplying the relevant goods or services on the proposed terms and the proposed price
• it may serve a notice stating it would have no objection to the person supplying the relevant goods or services on the proposed terms at a specified price, being a price that is lower than the proposed price or
• it may not serve any notice (in which case the proposed price applies).