PPA criticises Royal Mail's zonal pricing proposals

Daniel Farey-Jones, brandrepublic.com, 06 March 2007, 09:45AM

LONDON - The magazine industry trade body PPA has challenged the Royal Mail's new application to the postal regulator to introduce zonal pricing, claiming it will drive London delivery prices up.

Royal Mail has just submitted an application that amends the one it made last July.

It still wants to vary its pricing of certain services, including the magazine delivery service Presstream, according to geographical zones classified by cost of delivery, but is suggesting new zones.

It will offer a discount as high as 4.9% for three of the zones, A, B and C, where the population is high density and delivery costs are lower than average.

However, it will 4.8% extra for zone D, where the population is very low in density, and 2.5% extra for another zone, Greater London, which is approximately the area within the M25 motorway.

If it is approved, zonal pricing would replace the current "profile pricing" system available to Presstream users, which offers discounts for London deliveries balanced by surcharges for deliveries to remote areas.

The PPA has criticised Royal Mail for not consulting the magazine industry and not helping it to work out its costs under the proposed system.

Keith Jones, the managing director of Reed Business Information who chairs PPA's postal strategy group, said: "As usual, Royal Mail's latest plan to increase prices further came without warning, let alone any discussion; sadly publishers are getting used to this approach. We believe zonal pricing will benefit no-one except perhaps, Royal Mail."

PPA is pressing Royal Mail for the issue of an electronic "impact calculator". It said when Royal Mail submitted its original proposals in July last year publishers had to wait a month for the issuing of a calculator.