ACCC objects to Australia Post’s proposed price increase

The Australian Competition and Consumer Commission (ACCC) today issued its view objecting to Australia Post’s draft proposal to increase the prices of the letter services over which it has a statutory monopoly. The three-year pricing proposal included an increase in the basic postage rate by 5c to 60c. The ACCC’s review of the proposal highlighted concerns with Australia Post’s demand and input cost forecasts. The demand forecasts were not transparently derived and were not therefore amenable to a critical review. Input costs were forecast to rise even though volumes were projected to fall, and this discrepancy was not adequately explained by Australia Post.

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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