19 February 2011 | Lindsay Clark

UK regulator Postcomm has cleared the way for the Royal Mail to increase the cost of its bulk mail distribution.

As one of the UK’s largest suppliers, Royal Mail’s pricing affects the majority of the nation’s companies.

This week, Postcomm confirmed its decision to accept Royal Mail’s request to allow it to increase prices on bulk mail to help maintain the modernisation programme within the public postal service. The regulator said it would also give Royal Mail greater commercial freedom in markets where competition is growing.

“We acknowledge the impact that such price rises are likely to have on customers and the risk that this may result in a further decline in mail volumes,” PostComm said.

However, it said that the report into postal regulation by Richard Hooper, published in December 2008 and updated in September 2010, “clearly identified that the universal postal service will remain under serious threat if Royal Mail fails to modernise and tackle its long standing inefficiency”.

When Royal Mail first requested Postcomm approval for its price changes in November last year, the Federation of Small Businesses, said any rise would punish Royal Mail’s customers. “It will put up their costs which they can’t pass on to [their] customers,” a FSB spokesman said.