Ireland

Give Me a Crash Course in . . . the rising price of stamps

A 72c stamp will now cost €1, as one step in getting An Post out of its financial crisis

Rural post offices: hundreds of Ireland’s 1,100 post offices could be targeted for closure. Photograph: Moment Open/Getty

Pat Leahy's face
Pat Leahy
Sat Mar 11 2017 - 00:00

I see the price of stamps has gone up

Indeed it has, and substantially. The basic 72c stamp will now cost you an even €1 – a 39 per cent rise – with similar increases in the cost of posting larger letters and packets.

An Post

says it is just catching up with the norm in European countries, but it’s still a hefty jump.

What’s the reason?

The company is in dire financial straits. It has told the Government that without the price rise it would have difficulty paying its €10 million-a-week wage bill to 9,000 employees next month. Officially the company plays down this prospect, but it has certainly made the case behind closed doors to Ministers. They facilitated the price rise by hurrying through the Dáil legislation to abolish a cap on the price of stamps. As soon as it passed its final stages in the Seanad during the week, An Post announced the price rises.

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What does the Government have to say about this?

Depends who you ask. The situation is complicated by the fact that responsibility is divided between Minister for Communications Denis Naughten, who has statutory responsibility for overseeing the corporate entity, and Minister for Rural Affairs Heather Humphreys, who has responsibility for the rural post-office network. And within her department the responsibility falls to Minister of State Michael Ring.

No doubt they are maintaining a team line on all this

Sort of. When Ring answered a Dáil debate on the subject this week the first thing he said was that it wasn’t his responsibility.

What’s the reason for the cash crisis?

Thing called email. Global mail volumes have halved, and, although the decline in Ireland hasn't been as steep, volumes of mail – and so the revenue from it – are projected to keep falling.

So will the price rise fix the problems?

Nope. But it will, An Post management hopes, buy enough time for the company to implement a restructuring plan over the next 18-24 months, to put the company – and the postal service – on a sustainable footing.

It has a plan for that, right?

It has more than one, actually. The businessman Bobby Kerr, who compiled a report on the future of the post-office network in 2015, has drawn up an action plan based on it. It reportedly calls for the closure of up to 80 small rural post offices, the expansion of services at others and a Government subvention of €58 million, although it hasn’t been published yet. Ring also has a group working on how post offices could become “community hubs”. But the company is also working on its own plan, for which it has retained the McKinsey management consultancy. That is expected to be far more radical, involving the closure of more post offices and redundancies.

So how many rural post offices will close?

Nobody has a number for that yet. The company will complete its restructuring plan in the next two months, but it has told the Government that more than half of post offices lose money. There are more than 1,100 post offices, so speculation is that the number targeted for closure could be in the hundreds. The company’s chief executive, David McRedmond, said this week that he wanted to ensure that every community of more than 500 people was guaranteed a post office. But that could leave an awful lot of villages without one. That is sure to provoke a furious backlash from rural communities and their representatives in the Dáil, where resistance is already gathering. Next week postmasters will stage a protest at the GPO, on O’Connell Street in Dublin. That will be the start of a long battle.

An Post