Post price rise will kill print volumes

Print customers could be forced to spend an extra $280,000 a year in postal charges if yet another price rise from Australia Post is approved.

Australia Post’s proposed price changes are an average increase of 2.8 cents for Regular PreSort and an average increase of 1.3 cents for Off Peak PreSort, from July this year.

The news has drawn ire from both Printing Industries and ADMA, which believe that print and direct mail will suffer as a result. According to Hagop Tchamkertenian, national manager, policy and government affairs, price increases will make the post a less attractive channel than electronic distribution.

“Printing Industries believes that mail prices are price-elastic, which means as prices rise, demand responds by registering falls,” he said. “This is turn has a negative impact on print and mail volumes.”

In its report to the ACCC, Printing Industries pointed out that a mid-sized print and mailing house estimated that the extra 0.5 cents charge for interstate customers would result in an additional $280,000 in postal charges to have their print and mail production performed for the full year.

“If Australia Post is truly interested in encouraging the usage of the off-peak mail service then it needs to address perceptions by users that it is an inferior service to regular mail,” Hagop added.

Rob Edwards, CEO of ADMA also fears tha the price increases will drive substitution to digital channels. “It will hasten the switch to non-mail channels,” he said. “Some of our members are primarily mail-based and cannot continue with increased costs so will have to investigate substitution.”

Edwards would like to see Australia Post bring in incentives based on volumes. “Mail is under an enormous amount of pressure globally but to truly promote the channel the more you lodge the greater discount you get is the way to go,” he added.