MCA publishes its decision on tariff adjustment proposed by MaltaPost plc (updated September 2011)
The MCA today published a decision approving an increase of 1 euro cent on single piece domestic mail up to 50 grams, as well as adjustments in the price of foreign outbound parcels to certain countries (please refer to table below).
Other requests made by MaltaPost regarding the price for registration of mail, for higher weight-steps of domestic mail (more than 50 grams) and for bulk mail, were not approved but will be considered within a future price control mechanism.
The MCA’s decision was taken following a thorough review of Maltapost’s cost accounting system to ensure it is sufficiently robust and according to best practice and a public consultation, which closed on 7 July 2011.
All tariff requests were evaluated separately and the MCA granted increases only when these were deemed justified. With respect to bulk mail, the MCA concluded that current tariffs are around the level of costs incurred by MaltaPost to provide such a service and hence no immediate adjustment is warranted.
As to single piece domestic mail, the MCA considered that the requested price increase of 1 cent in the 0-50g weight category is warranted, as opposed to the higher-weight-step categories.
The last revision of the tariffs for foreign outbound parcels took effect in 1997. Since then the tariffs paid by customers for the destinations in question have become substantially below costs, which continued to increase (such as air transport and foreign postal operator charges).
The MCA also took into consideration the impact of the proposed price increases on affordability. Its analysis revealed that based on the latest Household Budgetary Survey (HBS) published by the National Statistic Office (NSO), the share of postal-related household expenditure per annum is quite low, standing at around €18, down from €26 registered in the previous 2000 HBS, indicating that the impact of the tariff changes on household expenditure will be minimal. The same conclusion was arrived at when considering the impact on the Retail Price Index (RPI) which was estimated to show a negligible effect on its overall level.
From a sustainability perspective, the MCA performed various simulations to gauge the expected impact on the overall profitability of MaltaPost’s regulated activity taking into consideration costs, efficiency levels and trends in postal volumes. This analysis concluded that the overall profits of the universal postal service are expected to remain healthy and fair.
Table of Tariffs
Domestic letter mail (letter mail posted and delivered in Malta)
| Current € | Proposed € | Approved € |
Up to 50g | 0.19 | 0.20 | Yes (excluding bulk mail) |
50g – 100g | 0.26 | 0.28 | No |
100g – 150g | 0.35 | 0.37 | No |
For each additional 50g | +0.09 | +0.09 | No |
Registration of domestic postal articles
No increases approved.
Foreign outbound parcels - Air Mail
| Current | Proposed | Approved | ||
| For 1st kg | For additional ½ kg | For 1st kg | For additional ½ kg |
|
France | €15.37 | €1.00 | €20.37 | €1.29 | Prices for outbound parcels to all listed destinations approved. |
Germany | €12.39 | €1.07 | €23.38 | €0.94 | |
Italy | €15.65 | €0.51 | €19.47 | €1.46 | |
Netherlands | €10.13 | €0.91 | €18.50 | €1.40 | |
Spain | €11.90 | €1.09 | €18.88 | €1.34 | |
United Kingdom | €12.51 | €1.09 | €23.04 | €1.85 | |
Foreign Outbound Parcels - Surface Air Lifted
| Current | Proposed | Approved | ||
| For 1st kg | For additional 1 kg | For 1st kg | For additional 1 kg |
|
United Kingdom | €10.65 | €1.75 | €22.44 | €3.10 | Yes |