An Post - Price hike should be stamped out

EXACTLY a year ago, consumer anger erupted at news that An Post had received the green light to increase the cost of posting a letter.

As a monopoly, the State-owned company has a stranglehold on the Irish postal market. But it seems also to have a monopoly of the brass neck syndrome because 12 months later the State-owned group is once again knocking on the door of ComReg, the communications regulator, seeking yet another increase in postage rates.

Despite, or perhaps because of its exclusive position in the domestic market, An Post has been haemorrhaging money for years.

Regrettably, the ease with which ComReg approves price increases has engendered within the company a sense that it has a God-given right to dip its hands into the pockets of hard-pressed consumers.

Living in the premier division of the EU rip-off club, Irish people are paying through the nose for virtually everything.

Now the beleaguered customer is being asked to pick up the tab so An Post make good its losses.

That is the direct inference to be drawn from the statement by company director Larry Donald whose explanation was that the increases were necessary because An Post had serious financial problems.

Not surprising, given the degree of mismanagement seen at the company in recent years.

As a result, today’s bosses feel they have no option but to wield the axe in a bid to reduce its loss-making operations.

Under its recovery plan, An Post wants to cut 1,800 jobs in a 10,000-strong workforce. It plans, for example, to close its loss-making SDS parcel unit with 270 job losses.

At the same time, however, the company wants ComReg to approve a 14.5% increase in the price of a stamp. If the application is approved, it will bring the price of a 48 cent stamp to around 55 cent.

People have every right to be angry as this comes just 12 months after ComReg approved a 17% increase in postal charges, ratcheting up the cost of a stamp to 48 cents from 41 cents.

Besides ensuring that the company survives, ComReg must remain mindful of its responsibility to ensure customers are getting value for money. But the way things are going at An Post, the cost of posting a letter is becoming prohibitive.

Undeniably, from a public service viewpoint it is crucial for the company to be financially viable. But it is even more important for it to operate efficiently and give consumers a better service and real value for money.

Unless management and workers agree a cost-saving formula, inescapably involving job cuts in the name of efficiency, it will inevitably follow other State companies down the privatisation road. A dose of competition in the marketplace would not go astray.

That An Post is on a financial knife edge is undeniable. Last year, it ran up losses of €43 million but aims to be in the black next year.

Milking the public is not the answer.

The three-million-fall in the delivery of letters to Irish homes means it is already pricing itself out of the market.

People are fed up of incessant price hikes. The communications regulator should think twice before being free-and-easy with consumers’ hard-earned money.