The Australian Competition and Consumer Commission today issued its preliminary view on a revised proposal from Australia Post to increase prices across a number of its monopoly business mail letter services.
"The ACCC has taken the preliminary view that it should not object to Australia Post's revised proposal," ACCC chairman Graeme Samuel said.
"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."
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 business days. The increased gap between Off Peak and Peak prices could further encourage more efficient use of the postal network.
In addition, Australia Post has 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.
"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, that 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.
The ACCC is seeking comments from interested parties on the preliminary view. The closing date for submissions is close of business 14 June 2011.
The ACCC's preliminary view on Australia Post's proposal will be available on the ACCC's website.