The Australian Competition and Consumer Commission today issued its final decision on a proposal from Australia Post to increase prices across a number of its monopoly business mail letter services. The ACCC has confirmed its earlier preliminary view that it should not object to Australia Post's revised proposal.
"In forming this view the ACCC notes Australia Post is expecting to incur losses on its monopoly services. The ACCC has also taken into account the benefits of the revised proposal, including the changes to Off Peak services," ACCC Chair Graeme Samuel said.
Australia Post is not proposing to increase the 60 cent basic postage rate or the price of other Ordinary letters.
Australia Post is proposing to increase the prices of business mail services, including PreSort services which provide discounts to wholesale bulk mail customers who sort and barcode mail prior to lodgement.
At the same time, to encourage more efficient and flexible use of the postal network, Australia Post proposes to change its Off Peak PreSort letter services to make them more attractive to its bulk mail customers. This will be achieved with a reduction in the current delivery window of four business days to two. The increased gap between Off Peak and Peak prices could further encourage more efficient use of the postal network.
In addition, Australia Post had revised its initial proposal so that it now includes smaller increases to Off Peak business mail services than originally proposed, in some cases less than half as much.
Following that revision, some of the increases proposed by Australia Post include:
- small (PreSort) Regular letter (delivered in the state of lodgement) prices increase from 42.7 cents to 45.7 cents
- small (PreSort) Off Peak letter (delivered in the state of lodgement) prices increase from 41.6 cents to 41.9 cents.
"Beyond this price notification, the current approach to assessing prices, including the allocation of costs, needs to be re-examined given the environment of declining demand for traditional letter services," Mr Samuel said. "The ACCC and Australia Post have agreed to re-examine the current approach before any future major price notifications."
Australia Post has a statutory monopoly over the delivery of letters weighing less than 250g, which cost no more than $2.40 to send.
Under the prices surveillance provisions of the Competition and Consumer Act 2010, the ACCC has a role in assessing proposed price increases for Australia Post's monopoly letter services. The ACCC can decide to object or to not object to the proposed price increases.
On 27 May 2011, the ACCC released its preliminary view that it did not object to Australia Post’s revised pricing proposal.
The ACCC’s final decision has taken into account submissions received in response to its preliminary view and issues paper.
The ACCC's final decision on Australia Post's proposal will be available on the ACCC's website at www.accc.gov.au/postalservices