ACCC clears Australia Post price increase

The Australian Competition and Consumer Commission (ACCC) today announced it would not object to Australia Post’s Notification of price increases for the letter services over which it has a statutory monopoly. This decision by the ACCC follows an earlier objection to an Australia Post price increase proposal in December 2009.

The ACCC found that, in this Notification, Australia Post had responded to earlier objections. In particular, it had improved the quality and transparency of its demand forecasting approach, including using econometric forecasting methods, and implemented cost reduction measures, which should keep costs at a level more suitable to a firm forecasting declining volumes in the coming years.

Frontier (Australia) was engaged by the ACCC to critically assess Australia Post’s demand and cost input forecasts used in its notification. Frontier’s report is available here.

For more information, please contact Marita O’Keeffe at m.okeeffe@frontier-economics.com or call on +61 (0)3 9620 4488.

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