New study: Postal pricing is driven by demand, not cost

New study: Postal pricing is driven by demand, not cost

April 13, 2015

The European Commission has released a study by Copenhagen Economics on pricing behaviour of postal operators. The main conclusion is, that postal operators primarily price according to demand. This implies that users with good alternatives or low willingness to pay will achieve lower prices.


One example: The financial crisis reduced willingness to pay and led to lower prices. Another example: Prices for business mail have increased less than prices for private mail due to increased price sensitivity for business mailers.


The study concludes, that demand driven prices are generally welfare increasing. However, it also notes that prices sometimes are used anti-competitively – often in terms of too low, predatory, prices. The study gives an overview of how the regulatory framework address anticompetitive concerns and provides recommendations for better enforcement of general competition law and better regulation.


The full report can be downloaded from the website of the European Commission


For further information, please contact partner Henrik Okholm