AUSPOST MAIL PRICES HIKE TO IMPACT PRINT

The ACCC has given the country's mailing monopoly AusPost the green light to impose its latest inflation-busting price rises onto business, with PVCA describing the ACCC's decision as “baffling” and “rewarding AusPost failures”, and predicting the rises will have a “substantial impact” on the print and mail industry.

The basic postal rate (BPR) for letters will rise by 10 per cent from January 20 to $1.10, and the BPR is used as the reference point and gateway for AusPost to initiate business mail rate rises. Mailing rates for letters have already risen by more than 50 per cent in the last three years.

The AusPost strategy for dealing with falling letter volumes by raising prices and decreasing service levels has long been ridiculed by a frustrated mailing industry, which points out that the strategy does nothing but exacerbate the collapsing volumes.

Reacting to the latest price hike, the print business owners association Print and Visual Communication Association (PVCA) says it is “extremely disappointed at the ACCC’s decision to not object to the Australia Post price increase on the Basic Postal Rate”.

Andrew Macaulay, CEO of the PVCA says, “There is a direct correlation between Australia Post mail price hikes and a decline in mail volume, which is a negative impact on commerce, and negatively effects our members and the broader industry at large. We are incredibly disappointed and frustrated at this decision.”

Accoridng to the PVCA, the ACCC has again failed to contain a monopoly which is damaging to Australian commerce. It says when the basic postal rate increases, there is a demonstrable effect on print and mail volumes, and in the months following, on commerce in general. It says Australia Post has consistently failed to find operating efficiencies, repeatedly failed to deliver substantial innovation in service, and struggles to collaborate effectively with private sector stakeholders. The ACCC’s decision rewards Australia Post for these failures in a baffling move that will now add yet further pressure on SME’s across multiple sectors, says PVCA.

Walter Kuhn, president of the PVCA says, “This decision will result in a decline in mail volumes, but also more importantly in general print volumes, as business owners reconsider their marketing budgets. From the perspective of the industry association, this is not a good decision.”

The PVCA lays into the ACCC, saying it “appears that the ACCC is not delivering the standard of service, or giving the due diligence one would expect from a competition watchdog, and consumer protector. PVCA members and the broader industry, as well as the wider SME sector in Australia are appalled at this apparent endorsement of monopoly power.”

However, ACCC Commissioner Cristina Cifuentes said, “We are satisfied that the proposed price increases are unlikely to result in Australia Post recovering more than its cost of providing monopoly letter services, given the forecast decline in letter volumes.”

She also said that AusPost still had a way to go to reach the service levels of comparable overseas operations, commenting, “Although Australia Post has exceeded the efficiency targets it set for its monopoly letter services in 2015, it has not yet attained the efficiency levels of comparable overseas postal operators, but is on a path to bridging the gap.”

Australia Post CEO Christine Holgate is Australia's highest paid civil servant, looking at a $2.5m remuneration this year, which five times the salary of the prime minister, and more than double that of the CEOs of the RBA and the ABC.