A proposal by Australia Post to increase the basic postage rate by 5c next year will result in a significant drop in business demand for mail services, the Australian Direct Marketing Association (ADMA) has warned the postal operator.

ADMA reports that its members directly employ 715,385 Australians and produce revenues of AU$12.8 billion per annum, with much of direct marketing relying heavily on Australia Post’s mail delivery system (source: Commercial Economic Advisory Service of Australia’s report, ‘Direct Marketing in Australia 2006’).

ADMA CEO, Rob Edwards, said he was surprised how quickly the proposal to raise prices follows a hike in September 2008. He believes business mailers are likely to reduce letter volumes across all three ‘letter segments’ to migrate to other media if postal costs prove uncompetitive with cheaper communication channels, such as email, mobile and web applications.

Edwards (pictured below) added: “It is ADMA’s view that the proposed increase, should it go ahead, will mean there will be less mail and may result in the need for yet another price rise. ADMA calls upon both the Government and Australia Post to consider other options to increasing the basic postage rate at such a critical time for business. ADMA will be making representations to the ACCC voicing these concerns.”

Rob Edwards