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16
07
2014

According to draft legislation stamp prices will rise as of this autumn

The Ministry of Economic Affairs and Communication confirmed a draft regulation, which states that the price of postal services will universally increase on September 1st. The mailing cost of domestic regular letters will rise from 45 to 55 cents.

AS Eesti Post’s Head of the Mail Division, Kaido Padar, said that the last time stamp prices changed was in November of 2011, and it is no longer possible for the company to provide the service at that price.

“Client needs have changed within the year and the possibilities for communication have expanded, which has led to a decrease in the volume of letter services, while the demand for providing universal postal services has remained the same," said Padar.

Padar indicated that letter volumes have dropped steadily by 10% per year over the last few years, and in six years only 30 million letters have been sent, down from 60 million previously.
According to projections, the volumes of stamped standard mail sent within Estonia will fall to 2,8 million items by the end of 2014. This will mean a 43% fall compared to 2011.

A large part of the planned increase in prices is due to the almost 2000 first-level employee wage increases in the last two years. The national minimum wage rates will rise at the beginning of the next year, which will mean additional resources for the company to increase wages.

In addition, international transport costs have increased 5-10% and fees paid to other postal companies have increased 3-5% per year.

Although the increase in prices would lessen the loss in universal postal services, we must nonetheless consider that, according to prognoses, the universal postal services will experience a 2 million euro loss in the next year, even with the planned increase in stamp prices.

The price level will still be below the European average, even after the increase. Finland recently increased the price of domestic letters by 20%, with the price of a stamp at 1 euro. The price for sending a letter in Sweden costs 69 cents, while in Latvia it now costs 57 cents. Stamp prices have increased in 14 European countries within the last year.

The desired increase in prices concerns all universal postal services, which will rise an average of 18,2%. The prices will increase for both domestic and international letters and parcels with a weight up to 20 kg. The price increase will go into effect on September 1st once the regulation is ratified.

The increase in prices does not affect parcel machine prices, which will still remain the cheapest way to send parcels. It is possible to send parcels from a parcel machine to most European countries with pre-forms.

The company suggests using the e-service environment to send letters, where the domestic letter costs 54-65 cents, but also includes an envelope, paper and printing in addition to sending. It is possible to send both domestic and international letters and, unlike the usual stamped letter, the weight of the letter does not affect the price of the letter mailed from the e-service environment.

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