OFCOM Complaints Lead To Royal Mail Price Rise Postponement

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Marketing

Several Mailing Houses have pushed back against another Royal Mail price rise and have taken their concerns to OFCOM and an investigation has been opened under case reference CW/01356/09/26. This is the second proposed price rise from Royal Mail this year. The first increase, which came in January, already caused frustration for many. Now, this new proposal is being formally challenged. The Mail Competition Forum, which represents 17 mail access customers, has led the charge in raising this dispute. OFCOM hasn't named the companies involved, but the proposed price increase is now on hold while the complaint is fully investigated.

When will OFCOM resolve the complaint?

There’s no official timeline yet, but it’s possible the process could stretch into the new year if Royal Mail and the other parties don’t reach an agreement early on.

Why has the complaint against Royal Mail been raised?

OFCOM isn’t being asked whether Royal Mail can raise prices at all, but whether this latest increase is fair and reasonable, especially since it comes so soon after the last one in January. Mailing Houses were notified about the change under Contract Change Notice 129 (CCN 129) back in July, just six months after the previous increase. If the changes go ahead, businesses could end up paying around four pence more per item compared to December 2024. The worry is that this might lead to fewer mailings and a drop in Direct Mail volumes.

What could Ofcom decide?

There are really two likely outcomes here.

1. Ofcom agrees with Royal Mail

Ofcom might decide that the CCN 129 increases are fair and reasonable. If that happens, Royal Mail could go ahead with the full increase. Just because Ofcom is looking into the complaint doesn’t mean they think Royal Mail has done anything wrong at this stage. This is likely the outcome the MCF is hoping for. Ofcom could decide the proposed charges aren’t fair and reasonable. In that case, Royal Mail might have to adjust the increase, possibly making it smaller than initially suggested.

2. Ofcom reaches a position somewhere in between

There’s no official timeline yet, but it’s possible the process could stretch into the new year if Royal Mail and the other parties don’t reach an agreement early on. It could find that some elements or the overall level of the increase are unreasonable, leading to revised prices rather than completely eliminating the October increase.

Could Royal Mail still impose the full increase?

Yes, potentially. It’s important to remember that this postponement doesn’t mean Ofcom has blocked the increase for good. Ofcom plans to make a decision within four months. If Ofcom decides the CCN 129 charges are fair and reasonable, Royal Mail could still go ahead with the full increase, depending on the details of Ofcom’s decision and the usual process.