Royal Mail has confirmed this week that it will not be putting forward its business case on size-based pricing (SBP) to the Consignia Board until the end of the year, several months later than originally planned. The size-based pricing project team was due to make its recommendations to the board at its September meeting. The national carrier has said that it needs more time to work through the issues raised across its customer-base during the consultation process.
In the event of the proposals being accepted by the board and approved by the Regulator, and as a consequence of the extended consultation process, Royal Mail would not implement any changes related to size-based pricing until January 2004 at the earliest. This was confirmed by Jerry Cope, group managing director, Mail Services, in a letter to PPA this week.
Cope also said Royal Mail recognised the concerns felt by magazine publishers and confirmed that discussions were taking place internally on this very issue. He also offered some reassurance that should size-based pricing go ahead, Royal Mail would actively seek ways of mitigating the impact of the proposals on publishers.
Said Cope: “I can confirm that we are, if we proceed with SBP, actively looking at ways to mitigate the impact of SBP for publishers (and others). This includes considering whether it is possible to accommodate an alternative straight-line pricing approach (which we have discussed but which would need to include elements of a size-based pricing approach) or by making changes to the existing SBP proposal. Any solution would however, need to take into account the overall principle that our prices must be better aligned to our costs.
“As the project team have indicated when meeting with you, we have never intended to move forward on Presstream proposals without further consultation with PPA. Once we have completed our analysis and have firmer views to share with you, we will arrange a follow-up meeting.”
PPA chief executive Ian Locks said: “We welcome this response from the group MD for Mail Services that the discussion period on size-based pricing has been extended to the end of this year and take some comfort from his assurances that ways are being sought to mitigate the impact of size-based pricing on publishers were Royal Mail to proceed with the proposals. We will, of course, study any revised proposals in detail.
“In the meantime PPA remains fundamentally opposed to changes which would see magazines as net losers and more than 300 titles forced to change format or to close completely.”