Estonian Post to increase letter prices 28%
Estonian Post is seeking to increase the price of sending a letter by 28%, the first price rise in four years. A proposal has been sent from the Estonian Competition Authority to the Ministry of Economic Affairs and Communication for approval.
It seeks a 10-cent rate rise for letters up to 50g in weight, to 0.45 Euro-cents.
The proposal was based on a review of market trends carried out by the Authority’s postal unit at the beginning of this sumer.
Estonian Post (Eesti Post) made a EUR 7m profit last year, and has been profitable since 2007. But, as with other posts around Europe, mail volumes have been declining, and the company made a EUR 1m loss in its mail division last year.
Commenting on the need for a price rise, Estonian Post chief executive Ahti Kallaste said his company’s operating costs had increased since letter prices were last changed, in 2007.
He said: “It is not possible to continue offering high quality letter service with this price level any longer. During these last four years fuel costs have raised by 50%. Estonian Post is a business entity and we can´t accept making losses from our basic services.”
“Lowest in Europe”
Kallaste added that Estonian Post’s letter price “remains among the lowest in Europe”.
By comparison, domestic letters in cost 56 cents to send in Latvia, 75 cents in Finland, 63 cents in Sweden, and EUR 1.12 in Norway.
Estonia’s new price, which is proposed to come into effect in November, would match Lithuania’s domestic letter rate.
The Estonian Competition Authority found in its review that the low price of domestic letters meant the service was effectively being subsidised by other services. The Authority suggested the situation was distorting the postal market, which has been open to competition for two years, and representing a “burden” on the state-owned company.
State-owned Estonian Post operates 389 post offices across the Baltic state, employing 2,889 people and turning over EUR 52.7m a year, of which about EUR 10.9m relates to its universal postal service.
On average, the Post said Estonians sent 4.9 letters each last year.