Standard stamp prices look set to rise to almost €1 for each item by spring of next year under emergency measures to save An Post.
A financial crisis in An Post has forced the Government to lift the cap on postage prices in order to stop cuts to services. Average stamp prices could now increase by at least a third from 72c to between 90c and €1 by next March, An Post sources confirmed to the Irish Examiner.
Communications Minister Denis Naughten got approval at Cabinet yesterday to lift a price cap for An Post.
A decline in the volumes of mail being sent as well as increased wage costs for An Post are thought to be the main reasons why the price increase potential is being sought by the company. Prices of stamps have already risen twice in the last two years.
However, the minister will now introduce new legislation which restricts stamp costs increases.
Speaking at Government buildings, Mr Naughten confirmed An Post is in a “very difficult” financial situation. The move to change the legislation is necessary to protect five-day delivery postage services and to protect the overall postage network, added the Independent minister.
An Post is also looking at the costs of postal services in other countries in a separate review, he added, as part of a root and branch report.
Under current regulations, the communications regulator can agree to stamp price increases up to 75c over a five-year period. The new legislation will remove this price cap. “They [An Post] will have to take into consideration the impact that’s going to have on individual customers and on small business. And they will have to weigh that up with the communications regulator before any price increase is introduced,” said the minister.
Green Party leader Eamon Ryan told the Dáil the situation is a “deep crisis” and questioned why An Post had been allowed “drift” so that emergency legislation is now needed.
Taoiseach Enda Kenny though said the new legislation would allow the Government to reintroduce some price cap for stamps, so that An Post would not have “unfettered power”.
An Post, in a statement, said there had been significant increases in postage prices in Europe, but not in Ireland in recent years.
“An Post delivers an excellent service but must charge the correct price for that service,” said CEO David McRedmond.
An Post said it would change its pricing once the new legislation is in place with prices in the various mail categories increasing in a range from 14% to 35%. The average stamp price across many EU member states was €1.06, it also noted.
Postmasters said they fear stamp price increases would hurt business. But workers with the Communications Workers Union said they welcome the extra revenue.
An Post says electronic mail is impacting on its business, with an expected revenue drop of €15m alone because of this in 2016.
Labour TD Sean Sherlock said the company needs to consult widely with small and medium businesses on potential increased costs for postage services:”The minister must engage directly with businesses in towns and cities across the country.”
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