'Interim increase' pushes stamp up to 55c

The price of a stamp will rise by 7c tomorrow, and the bad news for consumers is that a further hike is also on the way.

A regular stamp is going up from 48c to 55c in what An Post dubbed an “interim increase” to be followed by another one in 2008. Tomorrow’s price hike was the first since 2003, and the company will seek another price rise next year to improve the quality of service, such as next-day delivery rates, a spokesperson said.

The regulator ComReg has ordered An Post to supply full accounting details of its services later this year and to review its prices based on that data.

ComReg said tomorrow’s price increases were less than the rate of inflation, as prices generally had increased by 11pc since the last stamp price increase in August 2003.

From tomorrow, letters up to 100g will be covered by the 55c rate – previously the standard charge only applied up to a limit of 50g, so the cost of posting an item between 50 and 100g will fall from 60c to 55c.

Discount

Business customers will receive a discount of 1c per item when they use meter franking machines or the permit system, making the cost of posting a standard letter 54c.

An Post said that they had been faced with significant cost increases since the last postal hike, as their wage bill alone had increased by 20m because of national partnership wage increases, while fuel costs had also soared.

The company is also facing the threat of having their most lucrative business cherrypicked away from them when postal services across Europe are liberalised in 2009.

The measures announced recently by EU Commissioner Charlie McCreevy will be debated at a seminar in Dublin tomorrow – organised by postal trade unions, with Communications Minister Noel Dempsey highlighting the challenges this will bring.

Lucrative

This is unlikely to mean rival postboxes on every corner, as it is more likely that companies will try and cherrypick the most lucrative services such as business mail in urban areas, an An Post spokesman said.

With the costs of delivering to rural areas far higher than in cities, the Government will have to come up with a mechanism for ensuring universal service in a deregulated market, said the spokesman. He added that the danger is that rivals will only be interested in the most profitable bits.