Big mail users slam ACCC approval for stamp price rise

Big mail users are warning the proposed price increase of basic stamps from 55c to 60c will not only be costly to business but will lead to a decline in the number of letters being sent and increases in e-communication alternatives.

Communications Minister Stephen Conroy is under pressure to oppose the increases that are set to take effect on June 28 after the ACCC reversed its initial opposition to the increase last week.

Bulk mail and ‘presort’ prices will also jump from 36.3c to 38.8c. They were previously as high as 38.25c in 1992 but have since been dropped due to improved productivity through automation.

Major Mail Users Australia, which represents large mailing houses, payment providers, marketing companies, share registry operators and printing companies, released an angry statement slamming the ACCC’s decision, claiming the watchdog “has pushed aside and disregarded the warnings of all major industry associations”.

The MMUA has also described Australia Post as a “communications monopoly that has had no regard to working seriously with customers over the past six years on cost reduction and process improvements”.

“Soon we will see the high volume users of paper-mail increasingly moving to e-communications systems,” MMUA chief executive John Gillroy says.

“The ACCC has created the climate that will increase pressure for a downward spiral on high volume mail usage.”

Every day 9,267,000 bulk mail articles are lodged and 6,414,000 domestic mail letters are posted, the MMUA says.

“Clearly, a lot of people and a lot of Australian businesses rely heavily on Australia Post and despite the drop in usage over the past few years, responsibility to all those affected by the price of mail should be an important element in the deliberations.”

Hagop Tchamkertenian, national manager for policy and government affiairs for Printing Industries Association of Australia, says he is very disappointed at the ACCC ‘rubber stamping’ the decision with only limited time for consultation.

He says increase would severely affect members by forcing their clients to use alternative e-communication options.

In an online survey of the association’s members, 82% of respondents said the postage increase will have a negative impact on profits, 59% said it would negatively impact their production and 27% said it would put their financial viability at risk.

“Australia Post hasn’t yet exhausted its price savings strategies,” says Tchamkertenian.

“We have shown them ways to minimise costs out of their operations but they have taken the easy option and gone for a price rise rather than making changes in their operations.”

Australia Post has defended the increase by arguing it’s only the third in 18 years and that prices have lagged far behind inflation rates over the past decade despite massive growth in the number of delivery points around Australia.

It also maintains Australia has the third lowest basic postal prices in the Organisation for Economic Co-Operation and Development, which incorporates 31 countries.

Australia Post has ruled out any further postage increases in the next two years.