Swiss Post will reduce its letter prices and simplify its range as of 1 July 2009 as agreed innegotiations between the postal operator and the Swiss price supervisor.
As the letter market undergoes further liberalisation by the Federal Council on 1 July 2009,the letters weighing more than 50 g will be subject to VAT by law and would thus become 7.6% moreexpensive. This would theoretically result in the introduction of a new price limit at 50 g, whichwould entail considerable outlay for both the customer and Swiss Post and would at the same timedisrupt Swiss Post’s pricing structure.
To avoid this, Swiss Post intends to charge VAT on all letters without passing on this extracost to the consumer, however. Business customers who are able to claim back VAT will benefit fromprice reductions of around 7% on all items weighing less than 100 g. The additional cost of VAT dueon letters as a result of less monopoly will be borne by Swiss Post.
In the logistics units, these price measures are set to cost Swiss Post around CHF 200million a year helping companies and consumers keep costs to a minimum amid the current economiccrisis. While both consumers and the economy benefit from the price advantages, these are expectedto have a negative impact on Swiss Post’s results, however.
Prices for large letters p to B4 format will be up to 20% cheaper and there will be fewerdifferent letter prices. Large A Mail letters weighing up to 500 g will now cost CHF 2 instead ofCHF 2.20 (up to 100 g) or CHF 2.40 (101-500 g). Heavier large A Mail letters (501-1,000 g) willcost CHF 4 instead of CHF 5. Bulk mailings and registered letters will also be less expensive. Allregistered mail items up to 500 g will now cost CHF 5. The format and weight limits, which arealready the most favourable in Europe, will be thus further simplified by the new letter prices.
For private customers, a regular A Mail letter weighing up to 100 g will still cost CHF 1 anda B Mail letter of up to 100 g will cost CHF 0.85. These prices were introduced on 1 January 2004.In real terms, prices have remained at the same level for the last ten years. In internationalcomparison, Swiss Post’s services are already among the most cost-efficient, the company commented.
The adjustment of parcel prices and prices for international consignments, originally plannedfor 1 April 2009, will be deferred for a year, Swiss Post said in a statement.
The official agreement is to be signed shortly. The price measures have still to be confirmedby the Swiss Federal Department of Environment, Transport, Energy and Communications (UVEK) in itscapacity as responsible body for the prices under the monopoly.
In February, the postal operator had planned price increases for international letters,parcels and courier items by about 7% and a one franc increase for domestic parcels up to 5 kg for1 April before it announced a delay in decision due to negotiations last week.
