The impact of size-based pricing on mail users

Practice area: Competition & Antitrust | Post | Regulatory economics
Client: Postwatch
Published: July, 2004
Keywords: quantitative analysis stakeholder surveys and consultations

This report presents the results of London Economics’ study for Postwatch concerning the impact of the change to size based pricing (SBP) proposed by Royal Mail in August 2003. The proposal represents a major change to Royal Mail’s pricing structure and would affect most postal users to varying degrees. The proposed price changes vary greatly across weight categories and product types. Some of the changes would be enormous. Some prices would increase by more than 200%, while others would decrease by more than 50%. In general, the prices of lighter products with off-format shapes would rise, while the prices of heavier items with more standard shapes would fall. The study assesses the impact of these changes on a wide range of commercial and non-commercial users.