PPA 2011: Royal Mail slammed for 'disgraceful' postal hikes

Speaking at the annual PPA Conference this week, Sylvia Auton, chief executive of IPC Media, strongly condemned the decision by postal regulator Postcomm to allow the national operator to double the permitted price increases on bulk mail. 

The impact of the ensuing postal hikes will start to take hold of IPC’s distribution costs from next week.

Auton said: "My subs postal costs are increasing by 12 and a half percent May 9 thanks to [regulator] Postcomm deciding that Royal Mail did not need to meet those efficiency targets, but instead would impose a tax on us as a business.

"Obviously Royal Mail has a monopoly position, we have no option but to pay. Subscriptions are an increasingly important market… we’re all focusing on following up subs files."

IPC, which publishes mass market women’s titles Look, Now, Chat and Woman, actually benefits from strong newsstand sales, with print subscriptions making-up about 15% of copy sales, so the situation stands to be far more significant for publishers already heavily reliant on subscriptions.

Auton stressed: "I think it’s very serious actually. It comes at a time when we are being pressured across all fronts.

"Often these things have a lot of unintended consequences, and I’m sure this massive increase in postal costs, which is two or three times inflation whichever market you’re looking at, is really quite disgraceful."

Paul Keenan, chief executive of Bauer Media, also condemned the move as "short-termist", and noted "over time publishers distribution options, in both on-and offline routes to market, are only set to expand".

Arnaud de Puyfontaine, the French chief executive of the National Magazine Company in the UK, said when a similar thing happened in France a few years ago, with the national postal operator increasing the postal rate by 15% overnight, it had helped accelerate the need to find new routes to market.

"It’s just another reasons why as an industry, we need to prevent the monopoly situation," he said. "We need to accelerate routes of market options so we are not in the hands of someone that decides, by the voice of God, that we have to incur such an increase."

Postcomm made the decision to allow the rises as the Royal Mail faces continued pressure from falling domestic mail volume sent by individuals in a digital age now dominated by email.

The regulator said the move was necessary to help protect the Universal Service provided by the Royal Mail. 

This article was first published on mediaweek.co.uk