issue:
An Ad Post increase of 20 percent originally scheduled to occur in two stages beginning last November has been delayed, gaining valuable time for ADMA members to adjust their business plans and saving the direct marketing industry over $16 million in postage costs.
Under the new arrangements, there will be a 10 percent increase in Ad Post prices from 1 July 2002 and AdPost service will be discontinued from 1 January 2003, resulting in a further nine percent increase as customers migrate to the equivalent Barcode Pre-sort service.
background:
Australia Post withdrew its draft notification of June 2001 after significant concerns were raised about the consultation process surrounding the proposed price increase.
In December 2001, after extensive consultations with Australian Direct Marketing Association's (ADMA's) Postal Issues Committee, Post lodged its formal notification of Ad Post price changes with the Australian Competition and Consumer Commission (ACCC).
In its decision, the Commission said, "The ACCC is of the view that the revised proposal allows companies to plan forward budgets in the knowledge of the increases."
The Commission accepted Post's arguments that Ad Post prices have not changed substantially since 1992, with the exception of the April 2000 reduction in the level of the discount. "The ACCC considers that it is also important to remember that Ad Post commenced as a discounted price incentive for advertising mail. Given that direct mail advertising is now a mature marketing medium, the ACCC considers that there does not appear to be a case for obliging Australia Post to provide a discounted mail service, when the price of the service does not cover its costs."
"This outcome emphasises the importance of a strong, unified direct marketing industry association," said ADMA CEO Rob Edwards. "Through our Postal Issues Committee, we were able to make a persuasive case to the ACCC that the proposed increase was ill-timed. To its credit, Australia Post reconsidered its position after consultations with ADMA and agreed to give industry the additional time it needs to adjust."
ADMA action:
Working with ADMA, Post has developed a set of Consultation Protocols that will give ADMA members earlier notification of future proposed price changes and an opportunity to provide input. Information and views expressed in this consultation process are to be taken into account by Post in formulating its proposals.
Source: ADMA Member Bulletin #02-0, 7 February 2002
Please contact ADMA on 02 9368 0366 for further information.