Postcomm okays RM price changes

Postcomm has given Royal Mail the green light to press ahead with size-based pricing.

Now renamed as Pricing in Proportion (PiP), the changes will result in the charging of items based primarily on size and format. The changes will come into force in August 2006 at the earliest.

The Periodical Publishers Association (PPA) said the changes are likely to result in higher costs for some lighter weight B2B titles because many will now fall under the large letter format (up to 250x353x25mm).

The PPA is also objecting to Postcomm's decision  not to intervene on Royal Mail's Mitigation Scheme, which offers rebates on any increases incurred through PiP. The two qualification thresholds are for companies spending a minimum of 100,000 on post or experiencing a 50% rise in what they spend because of PiP. The PPA believes this should only be 15%.

"We are disappointed that Postcomm has chosen to wash its hands of the mitigation scheme," said PPA chief executive Ian Locks.

"We believe this is an unrealistically high threshold and will be lobbying Royal Mail to do more to help those publishers facing unacceptably high increases of up to 50%."

A spokesman for Postcomm said: "We felt that the scheme went as far as it was likely to go."

The spokesman added that there were customers who would loose out but that the Royal Mail had to balance prices with costs.

"While there are losers in this, we have made sure that the changes have been reasonable," he said. "It is not as much as Royal Mail had originally proposed."

Printers have expressed fears that any cost rises will be passed on down the production chain.

Story by Philip Chadwick