PPA wins first round against Royal Mail’s price hike proposal

Magazine industry chiefs have claimed a partial victory in their fight to prevent Royal Mail being allowed to make hefty price increases on its distribution products.

The Periodical Publishers Association (PPA) has persuaded regulator Postcomm to recommend continued price-capping of Royal Mail’s Presstream 1 product. It feared extra distribution costs would be passed on to consumers via cover price rises (MW December 1). The “next-day” service is used by about a quarter of publishers to distribute trade press across the UK.

But the PPA remains concerned that Postcomm will allow the removal of price controls on three-day service Presstream 2, which is used by the remaining publishers.

This could leave Royal Mail free to hike the price of the “second-class” service – a situation that would be exacerbated by the introduction in August of the postal operator’s Pricing In Proportion (PIP) scheme, which charges postal rates according to an item’s size, rather than weight.

PPA director of circulation Nicola Rowe explains: “There will be a greater price margin between Presstream 1 [which will face increases anyway under PIP] and Presstream 2.

“Royal Mail will have more leeway to raise the price of the Presstream 2 service even higher, affecting a majority of publishers.”

A final, three-month consultation period on the changes ends on March 6.

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