No sooner than August 18 next year, Royal Mail is set to change the way it charges for post to account for the size of items, after postal industry regulator Postcomm gave it the go-ahead last week. However, it has agreed that it will not make any extra overall revenue from the pricing changes, and has to balance prices rises with reductions.
Royal Mail has said its 'mitigation scheme' will be open only to customers which spend a minimum of £100,000 per year and see their postal costs rise by 50% or more as a result of the pricing changes.
The Periodical Publishers Association said the compensation scheme has an "unrealistically" high qualification threshold which puts its members at a disadvantage and it will be lobbying Royal Mail to lower it.
The PPA argued that the qualification threshold should be lowered to a 15% cost increaase, in its submission to the Postcomm consultation about the introduction of Royal Mail's size-based pricing.
Ian Locks, the PPA chief executive, criticised the regulator, saying: "We are disappointed that Postcomm has chosen to wash its hands of the mitigation scheme and leave the detail to Royal Mail."
In addition, the PPA's postal committee is finalising its response to Postcomm's consultation on Royal Mail's price controls. Postcomm has said that it intends to remove Royal Mail's Presstream service from regulation from April 2006, meaning the services would not be subject to price control or quality of service performance measures.
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