Death of snail mail sees ACCC rethink postal price hike

The Australian Consumer and Competition Commission has signed off on increases to the price of sending business letters, and warns future price negotiations need a new approach because we're all sending fewer letters.

Businesses that send a lot of letters are about to find their costs increase, thanks to a new ruling on the price Australia Post can charge by the The Australian Competition and Consumer Commission (ACCC).

The ACCC needs to get involved because Australia Post has a government-decreed monopoly on certain types of postal service. Anyone wishing to compete with Australia Post on basic letters, for example, must charge four times the price of a basic stamp (you can read about it here).

Australia Post has to get any price rises signed off, and the ACCC did so today for two products: "small (PreSort) Regular letter" and "small (PreSort) Off Peak letter."

The new price for the former is 45.7 cents, up three cents. Off Peak letters are up .3 of a cent to 41.6 cents apiece, rises the ACCC said were agreed after Australia Post pulled back from a request for larger increases.

Interestingly, in the press release announcing his approval of the increase, ACCC chairman Graeme Samuel said he doesn't think rises of this sort can be negotiated this way in future.

"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."

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