Zonal pricing by Royal Mail
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On 5 July 2006, Postcomm received an application from Royal Mail which proposed the introduction of 'zonal' (geographically varied) prices for certain bulk mail products used by the largest mailers (eg banks, utilities, advertisers, charities and government). At present, Royal Mail charges the same 'one price goes anywhere' rate for the bulk mail products concerned.
Royal Mail's application does not affect any other postal products, including:
- stamp prices;
- any other service commonly used by household and small business customers, or
- the bulk mail products that are included within the definition of the universal service.
On 11 September 2006, Postcomm published a document seeking views on the issues that it should take into account when it assesses these proposals. This consultation closed on 11 December 2006, and the responses we received are listed below.
On 20 February 2007, Royal Mail submitted a modified version of its application, still proposing zonal pricing but amending the proposed zones and prices.
On 2 April 2007, Postcomm wrote to customers and operators about the application, letting them know that we had now been provided with sufficient information of good quality to assess Royal Mail's modified zonal pricing application, and that the nine-month assessment period had begun.
On 20 April 2007, after a number of requests, Postcomm wrote to stakeholders informing them that the deadline for responding to the letter of the 2 April had been extended to 1 June 2007.
The consultation closed on 1 June 2007 and the responses we received are listed below.
On 23 July 2007, Postcomm announced that it proposes to reject Royal Mail's zonal pricing application. Full details followed in a consultation document published on 17 August 2007.
On 14 December 2007, Postcomm announced that it had rejected Royal Mail’s zonal pricing application, and published its determination on 27 December 2007. The reasons for this were set out in a decision document published on 5 February 2008.
On 30 April 2008, Postcomm received summons from Royal Mail that they intend to seek a judicial review of the regulator's decision to reject the zonal pricing application. Further updates will be added to the website as the case progresses.
More background on zonal pricing.
- Link to Royal Mail's zonal pricing web page.
Related documents:
- 1 May 2008 - statement
- Postcomm response to Royal Mail's judicial review of retail zonal pricing decision
- 5 February 2008 - decision document
-
Royal Mail’s Retail Zonal Pricing Application for Non-Universal Service Bulk Mail Products - Postcomm's decision (pdf, 638KB)
Appendix 3 - LECG's further analysis (pdf, 181KB)
Appendix 4 - The Cave Opinion (pdf, 144KB)
Appendix 6 - Frontier Economics' analysis and update (pdf, 149KB) - 27 December 2007 - determination
- Determination indicating dissatisfaction with application to introduce zonal pricing (pdf, 35KB).
- 14 December 2007 - news release
- Postcomm rejects Royal Mail's retail zonal pricing application
- 4 December 2007 - RSW Geomatics report to Postcomm on the use of Postcode Sectors for the determination of Delivery Point Densities for Retail Zonal Pricing
- RSW Geomatics report (pdf, 856KB)
12 November 2007 - responses to Postcomm's consultation on Royal Mail's proposal to introduce zonal pricing
Royal mail response, November 2007 (pdf, 347KB)
Non-confidential responses (pdf, 196KB)
- 17 August 2007 - proposals document
- Royal Mail's retail zonal pricing application. Postcomm's proposals (pdf, 481KB)
- 17 August 2007 - Europe Economics analysis
- Retail zonal pricing review. Analysis of forecast mail volumes and switching behaviour (pdf, 166KB)
- 17 August 2007 - Frontier Economics analysis
- Retail zonal pricing: impact on Royal Mail's volumes and revenues. A report prepared for Postcomm (pdf, 297KB)
- 17 August 2007 - LECG analysis
- Retail zonal pricing review. Analysis of zonal costs (pdf, 455KB).
- 17 August 2007 - news release
- Postcomm issues consultation on proposal to reject Royal Mail's zonal pricing application
- 23 July 2007 - news release
- Postcomm proposes to reject Royal Mail's zonal pricing application
- 27 June 2007 - consultation responses
-
Non-confidential letters from MPs and AMs about Zonal Pricing Proposals(pdf, 97KB).
Non-confidential responses to Postcomm's consultation on Royal Mail's proposal to introduce zonal pricing (pdf, 1089KB). - 12 June 2007 - news release
- Postcomm forum - strong feelings and diverse views on zonal pricing
- 20 April 2007 - stakeholder letter
- Postcomm’s consultation on Royal Mail’s proposal to introduce “Zonal Pricing”: Extension of the deadline for initial responses (pdf, 28KB).
- 2 April 2007 - stakeholder letter
- Royal Mail’s Proposal to Charge Large Mailers by Delivery Location “Zonal Pricing” (pdf, 107KB).
- 2 April 2007 - news release
- Postcomm to examine Royal Mail request to price bulk mail products by delivery zone. Royal Mail applies to charge higher prices for delivery to London and rural destinations; lower prices elsewhere
- 20 February 2007 - Royal Mail application
- Application under licence condition 21 for approval to offer geographic zonal prices for bulkmail services (Modified) (pdf, 238KB)
- 23 January 2007 - consultation responses to September 2006 consultation document "Zonal pricing by Royal Mail"
-
Charterhouse (pdf, 12KB),
Communication Workers Union (CWU) (pdf, 24KB),
Direct Marketing Association (DMA) (pdf, 35KB),
Eden District Council (pdf, 43KB),
Emap Communications (pdf, 106KB),
Highland Council (pdf, 26KB),
Mail Matters (pdf, 21KB),
Mail Competition Forum (MCF) (pdf, 38KB),
Mail Users Association (MUA) (pdf, 38KB),
Postwatch (pdf, 85KB),
TNT (pdf, 56KB),
TNT slides (pdf, 1.3MB) - December 2006 - Royal Mail response to September 2006 consultation document "Zonal pricing by Royal Mail"
- Royal Mail response, December 2006 (pdf, 76KB).
- 30 November 2006 - Zonal pricing mini workshop
- For full details, see zonal pricing web page
- 11 September 2006- consultation document
- Zonal pricing by Royal Mail (pdf, 150KB)
- 11 September 2006- news release
- Postcomm consults on zonal pricing by Royal Mail
- 5 July 2006 - Royal Mail application
- Royal Mail. Application under licence condition 21 for approval to offer geographic prices for bulkmail services (pdf, 262KB).
