Customers of An Post are being "punished" for An Post's "inefficiencies and incompetence", a group representing small businesses has said in response to the company's request for price increases.
An Post confirmed it has sought a 14.5 per cent rise in the price of a stamp from the communications regulator, Comreg. If the application is approved, it is expected to bring the price of a 48 cent stamp to around 55 cent. An Post wants the new pricing structure to be introduced as soon as possible.
The Irish Small and Medium Enterprises Association (ISME) said An Post had increased prices by 45 per cent in two years, or six times the corresponding rate of inflation. It said this was another "body blow" for small businesses and called on the Minister for Communications to intervene to prevent the price rise.
ISME chief executive Mr Mark Fielding said the application by An Post was "outrageous".
"What is most galling is that this application is as a consequence of An Post's deteriorating postal service which has been characterised by disruption, delay, incompetence and inefficiencies. Effectively, An Post is asking the already beleaguered business community to pay more for a deteriorating service, which is completely unacceptable," he said.
"An Post, like any business in the non-sheltered sector, must focus on tackling the underlying problems in the cost base, restructuring the restrictive work practices and eliminating management inefficiencies.
They cannot incessantly abuse their commercial monopoly by looking for price increases, which will have a negative effect on demand in the long term."
Mr Fielding said the price rise, if approved, will add to the cost of doing business in Ireland at a time when businesses are already faced with significant hikes in energy costs due to rising oil prices and the threat of further increases in electricity prices.
This latest request from An Post comes just 12 months after a 17 per cent increase in postal charges was approved by Comreg. This raised the cost of a stamp to 48 cents from 41 cents.
This morning An Post's Director of Corporate and Regulatory Affairs, Mr Larry Donald, said there would be a period of public consultation before any decision was made.
He told RTÉ's
Morning Ireland
the reason why An Post needs a price increase is "the fact [that] the company has very serious financial problems.
"Last year, 2003, the company had an operating loss of €43 million. It is absolutely vital from the point of view of public service that An Post is in a financially viable situation. So there are a number of methods, a number of elements to the way in which the whole financial situation is being tackled," he said.
"Obviously price is part of the solution. But obviously on top of that it is critical that we have agreement with our trade unions on the major change programme which will lead to cost reductions and lead to efficiencies throughout the organsiation."
As part of its recovery plan An Post is seeking up to 1,800 redundancies from its workforce of 10,000. An Post recently announced it is to close its loss-making SDS unit with the loss of 270 jobs.
Mr Donald said An Post's target was for the company was to reach break-even by 2005.