UK Postcomm refutes claims on zonal pricing

Postcomm has refuted reports that Royal Mail may be considering introducing zonal pricing across its public mail services. Postcomm’s response follows claims by Royal Mail chief executive, Adam Crozier, that Royal Mail loses an average of 5p on every first class letter.

Said a Postcomm spokesperson: “Royal Mail cannot introduce ‘zonal pricing’ – nor can Postcomm let it – as most of Royal Mail’s services are ‘universal’ – and an Act of Parliament requires that universal services must be provided at a national uniform tariff.”

Exceptions to this rule are the non-universal Presstream service which has always been zonally priced and also Mailsort 3, the slowest bulk-mail service which could in principle be zonally priced. The same principle also applies to access services where Royal Mail delivers items on behalf of other operators.

Meanwhile, Postcomm is still assessing responses from customers to its size-based pricing (SBP) consultation. Once this has been completed, Postcomm will issue a second consultation document, likely to be some time in September.

PPA is continuing discussions with Royal Mail concerning its plans to include a measure involving the uniformity (flatness/ evenness) of the piece being mailed. PPA has put to Royal Mail an alternative proposal which publishers believe is more cost-reflective than the existing one and will enable publishers to accommodate product variations without risk of incurring a heavy cost penalty and to budget more effectively when planning their advertising and promotional activity. In its submission to Postcomm, PPA asked for the Regulator’s support for the amended proposal.

Details from Nicola Rowe on 020 7400 7527 or email [email protected]