An Post has welcomed a move by Irish politician Denis Naughten, minister for communications, climate action and the environment, to remove the price cap on stamps, enabling the national operator to increase its pricing in line with European peers.
According to a report from the TheJournal.ie, Naughten brought a memo to government today (December 6), seeking permission to draft a piece of legislation that would remove the price cap of an An Post postage stamp. It is reported that the move is in response to An Post’s “very difficult financial situation.”
An Post has reported that the extent of decline in the mail business will result in a 12m (US$12.9m) to 15m (US$16m) loss in 2016, and an even greater loss in 2017.
According to An Post, letter prices in Europe increased by 36% from 2007-2015, with further increases of up to 10% in 2016, while prices in Ireland have increased by only 16% in the same period.
An Post has said that it will make the change in pricing once the legislation is in place in early 2017, with prices in the various mail categories increasing in a range from 14% to 35%, putting it in line with the average EU stamp price of 1.06 (US$1.14).
David McRedmond, the recently appointed CEO of An Post, said, “Across the world, postal companies have taken the necessary steps to increase prices to ensure delivery of service is maintained. An Post delivers an excellent service but must charge the correct price for that service. Mail is an important medium and even with these increased tariffs, still represents real value, and where the impact is greatest (on high volume users such as SMEs and larger businesses), An Post will do everything possible to mitigate the impact through improved volume discounts.
“While a price increase will provide near-term certainty for the company in its mails business (without any recourse to state subsidy), it is essential that we complete the current strategic review thoroughly and urgently to design the service and company for the long-term future. I am determined that the evolving strategy takes full account of An Post’s economic and social responsibilities.”
December 6, 2016