La Poste announces 2.8% postage increase from January 2013

La Poste has said its postage rates will increase by 2.8% on average from 1st January 2013, some 18 months after the last rate change. The French national postal operator said the increase was lower than the 3% rate of inflation as forecast by INSEE, the national statistics and economic studies institute.

La Poste said the rate rise would help it to maintain a high quality of public service while also fulfilling its social responsibilities.

The company said challenges it face mean its costs have increased for delivering standard letters by between three and five cents per letter.

But the price rises it is actually making are for a three-cent rise, to EUR 0.63, for priority letters and a one-cent rise for the standard single-piece retail “Green Letter” product, to EUR 0.58.

La Poste launched its “Green Letter” product a year ago, as a more economical and environmentally-friendly letter service, which keeps carbon emissions down by avoiding air transport, other than Corsican destinations and mail going overseas. The letter generates 30% less carbon emissions than a priority letter.

The company said it has been delivering 50m green letters a month this year.

La Poste argued that its price increases would have “little impact” on households, averaging EUR1 per household each year, since mail is now a “very minor” item in the average French household, which spends around EUR 30 a year on postage.

Business mail

Business mail rates for larger mailers will increase 1.8% from January. La Poste said this “moderate” increase would continue its policy of effectively lowering tariffs for its larger customers in comparative terms with respect to inflation.

La Poste’s SME mail product “Destineo esprit libre” will have its rates increased by 1.5%, “to support their competitiveness in a difficult economic environment”, with the not-for-profit and public sector “Destineo utilité publique” rates remaining unchanged.

The company said its price increases were also in line with general trends in Europe, and that French stamp prices would be almost exactly at the European average, even though “public service commitments and geographical challenges are higher in France”.

“La Poste effectively delivers the mail six days out of seven in all conditions across one of the largest territories in Europe,” the company said.

La Poste’s new postage rates were approved by French regulator ARCEP on 6th November.

The regulator actually allowed La Poste room to raise rates up to one percentage point above inflation each year until 2015.

It accepted La Poste’s view that its operating costs were changing as a result of a 4.7% average decline in mail volumes each year since 2009, and a prediction of a 4.1% annual mail volume decline between now and 2015.

ARCEP said it still wants La Poste to work on improving its service quality, for both its Priority Letter and the Green Letter service.

The regulator said that in order to do this, it will put together an additional incentive linked to the company’s tariffs. The incentive system will be developed early in 2013, and would be applied from mid-2014 to encourage La Poste to improve its service levels.

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