Postal increase for newspapers postponed

An Post has agreed to defer the introduction of new postal rates for newspapers and periodicals while consultation continues with publishing companies affected by the increases.

In a statement yesterday, however, it said "the legal requirement to charge cost-related prices will have to prevail in due course".

The company was reacting to a call from the National Newspapers of Ireland (NNI), the representative body for daily and weekly newspapers, for the Minister for Public Enterprise, Ms O'Rourke, to intervene to stop the new rates being introduced.

Under the new pricing structure, postage costs to British subscribers will at least be doubled and, in some instances, trebled.

An Post said it was delivering newspapers to such subscribers at a loss and it was obliged to increase prices under an EU postal directive which prohibited below-cost selling of services.

Mr Gavin O'Reilly, chairman of the NNI, said this directive had yet to be implemented in the Republic "and thus it would seem that An Post is acting beyond its powers with no legal basis". In the absence of the enactment of the EU directive, which would open up the market to competition, "An Post must surely remain bound by the old regime and, therefore, is still subject to Government price control".

A spokesman for Ms O'Rourke said, however, it was "a matter entirely for An Post".

To date, publishers have been able to avail of a flat-rate system for newspapers of 30p within Ireland and 40p to Britain. Under the new weight-based price structure, Irish rates will increase to between 35p and 70p and British rates to between 80p and £1.35.

In its statement, An Post said that "since the announcement of the new rates the company has received a number of representations from publishers highlighting the difficulties caused by the short notice period in advance of the changes. In view of these representations it has been decided to defer all newspaper rate increases.

"Over the next two months we will work closely with our customers to find ways to save costs jointly and thus mitigate the impact of the increases."

However, Mr O'Reilly said An Post was abusing its dominant market position.