Printing Industries has attacked Australia Post's proposed price hike as short-sighted, and liable to king-hit already weakened print mail volumes. Australia Post plans to raise the cost of stamps by 17%, up from 60 cents to 70 cents, in a bid to stem the $multi-million losses ravaging its regulated mail service.
Australia Post puts its proposal to the ACCC today, calling for a 10c price bump effective March 31, 2014, only the fourth such increase in 22 years. The PIAA has come out swinging, accusing Australia Post of misrepresenting its trading performance to avoid changing its business model and implementing more efficient systems demanded under market competition. Speaking with Print21 PIAA CEO, Bill Healey, has called Australia Post to task for ignoring a consumer demand for print mail.
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"Australia Post has ignored its own evidence that print will remain a key component of the emerging multi-channel communication world. The market still wants print based mail, and they will be denied that by these policies," said Healey.
Healey refers to a consumer survey conducted by Australia Post itself, in late 2012, that showed that 42% of respondents favoured print mail for bills and statements, with only 31% choosing email, and 25% wanting a choice of both. Australia Post itself currently operates as one of the largest DM printers in the business, under its PostConnect brand. Ahmed Fahour, managing director and CEO of Australia Post, maintains that the trend toward online communication and transaction has led to a massive decline in print volumes, down from a FY2008 peak of 4.6 billion to 3.6 billion last financial year, and that the proposed increase will partially offset these growing losses.
According to Fahour, "Today, the average number of letters delivered per letterbox each day is 1.5, down from 2.0 in 2008 and a decrease of 25%. This is a consistent trend all around the world. We are always reluctant to increase the price of postage but we know that it's absolutely necessary to maintain essential services and support our critical retail network of more than 4400 outlets."
Healey criticises the transparency of Fahour's figures, though, agreeing that while overall numbers are indeed dropping, Australia Post is now also servicing a larger catchment which he contends has the scope to distort these trends. He also takes issue with the lack of competitive practice surrounding the response to the drop in mail volume, describing Australia Post as a classic example of a monopoly ignoring efficiencies demanded under market competition.
"They've given up the ghost. The issue is not privatisation, it's competition. The demand that we know is out there can and should be serviced better. The future of delivery needs to be considered in an innovative way, and that won't be addressed unless there's a degree of competition in the market. There is no competitive tension to take advantage of consumer desire to hold onto print based communications.
"They're saying that direct mail is on it's last legs, but their own research challenges that and shows that there's a huge value for personalised mail. Consumers continue to want it, and when its total environmental impact is legitimately assessed timbre-based materials will be seen as more beneficial than electronic," says Healey.
Australia Post's proposal also includes the introduction of concession rate stamp to maintain 60 cent postage for an estimated 5.7 million eligible concession holders until 2017, and further promises to lock in the new 70 cent rate for at least three years. The number of letters covered by the concession would be limited to 50 a year.
Australia's current BPR is the second-lowest in the OECD, which averages $1 a letter, and even if it get the 10 cent increase it will still remain one of the lowest.