ACCC stamp out Australia Post price increase
The Australian Competition and Consumer Commission (ACCC) has objected to Australia Post’s draft proposal to increase the prices of the letter services in 2010. Australia Post provided the ACCC with its draft pricing proposal on 24 July, which sought increases in the prices of a number of its Small, Large and PreSort letter services. Australia Post also sought to increase the basic postage rate from 55 to 60 cents.
Demand for Australia Post’s monopoly letter services declined significantly between 2007-08 and 2008-09, and Australia Post expects the decline in demand to continue.
“The relationship between demand and costs is a critical issue,” ACCC chairman Graeme Samuel said today. “The ACCC recognises that some of Australia Post’s costs are fixed. However, overall the cost base would be expected to respond as demand declines. The proposed costs of Australia Post in the material provided to the ACCC do not reflect this decline.”
The ACCC has also been unable to determine how Australia Post’s demand forecasts were derived.
“Accordingly, the ACCC is unable to agree to Australia Post’s proposed price increases at present,” Samuel said.
