Proposed price rise on stamps 'unreasonable'

THERE was angry reaction from the public and private sector yesterday to news that An Post is seeking a 14.5% increase in the price of a stamp from the communications regulator, ComReg.

The State's postal service was accused of using anti-consumer tactics in its attempts to turn around a dismal financial situation that last year saw it operate at a loss of €43 million.

Fine Gael MEP Simon Coveney called on ComReg to reject the request and criticised An Post for "relying on the consumer to bail them out".

He said: "It is unreasonable to ask the consumer to shoulder a 30% increase in the cost of a stamp in the space of a year. An Post must concentrate on improved efficiencies and cost saving, not on increasing charges to the consumer."

The latest request comes just 12 months after a 17% increase in postal charges was approved by ComReg, raising the cost of a stamp from 41 to 48 cents.

If the latest application is approved it will bring the price of a 48 cent stamp to approximately 55 cent. Stamps for post abroad would rise from 56 cent to around 65 cent.

ISME, which represents small and medium-size businesses, accused the State company of abusing its commercial monopoly, insisting such price hikes would have long-term implications for the cost of doing business in Ireland.

ISME chief executive Mark Fielding said: "This latest application is outrageous. If approved, it will give a 45% increase in the last two years, which is six times the corresponding rate of inflation.

"An Post must focus on tackling the underlying problems in the cost base, restructuring the restrictive work practices and eliminating management inefficiencies," he added.

He called for the intervention of Minister for Communications Dermot Ahern to ensure the application was refused.

An Post, however, wants the new pricing structure to be introduced as soon as possible. The company's director of corporate and regulatory affairs Larry Donald said the increase was necessary to turn around the company's fortunes.

"It is absolutely vital that An Post is in a financially viable situation," he told RTÉ's Morning Ireland programme. "So there are a number of elements to the way in which the whole financial situation is being tackled," he said.

"Obviously price is part of the solution. But it is also critical that we have agreement with our trade unions on the major change programme."

As part of its recovery plan An Post is seeking up to 1,800 redundancies from its workforce of 10,000. An Post recently announced it is to close its loss-making SDS unit with the loss of 270 jobs.

Mr Donald said An Post's target was for the company to break even by 2005.