- Billionaire suggests costs could continue to rise in coming years
- The price of a first class stamp has increased from 67p in 2018 to £1.35 today.
- IDS accepted Kretinsky’s £3.6bn offer after he made a series of commitments
Looking to the future: Daniel Kretinsky
Future Royal Mail owner Daniel Kretinsky refuses to rule out further price increases for first-class stamps.
The billionaire, nicknamed the ‘Czech Sphinx’, has suggested costs could continue to rise in the coming years.
‘I can’t make unconditional commitments. If your circulation is 50 per cent of what it was… you either need to go home or you need to raise the unit price and expect people to pay for it,’ he told The Sunday Times.
And he added: “Because if not, you are suffering losses.” You can have losses for one or two years, but you can’t have losses for 20 years. It’s simple mathematics.’
This comes as Royal Mail has periodically increased the cost of stamps to counter weaker demand and rising losses.
The price of a first-class stamp has increased from 67p in 2018 to £1.35 today.
Last week, Royal Mail’s parent company International Distribution Services accepted a £3.6bn offer from Kretinsky after he made a series of commitments, including promises of jobs and six-day service across the UK. .
By law, the 508-year-old company must deliver letters six days a week, at the same price. You must also deliver the packages within five days. But the results show that Royal Mail is losing around £1 million a day in an effort to meet these targets.
However, ministers have expressed concern about the tycoon. Chancellor Jeremy Hunt said regulators should examine “very carefully” promises made by Kretinsky, such as a promise not to break up his parent company. The billionaire has acknowledged “the intuitive concern” about a foreign entity pouncing on Royal Mail.
“Any strange moment is something that irritates.” But Kretinsky said he is “convinced we will help the company.” IDS shareholders will vote on the deal at their annual meeting in September.
