Royal Mail under fire for hiking prices
Key Points
- Ofcom has announced it will resolve a dispute between Royal Mail and its wholesale customers over price increases for access operators.
- These price increases will result in an average price rise of 25%, which would likely be passed on to services such as banks, government departments, and the NHS.
- Ofcom said that it would resolve the dispute brought by the Mail Competition Forum and determine whether the wholesale price rises were fair and reasonable.
- This follows after Ofcom launched an investigation into Royal Mail over unacceptable delivery standards.
Ofcom has agreed that it will oversee and resolve a dispute between Royal Mail and its wholesale customers after the postal service announced significant increases to its wholesale prices.
Wholesale customers of Royal Mail are postal companies, known as access operators, which collect and sort mail sent by large organisations. These organisations include some of the UK’s biggest banks and government departments, as well as the NHS.
Ofcom’s rules require that Royal Mail offer access to its postal network for this type of bulk mail collection and sorting and that the charges and terms set by Royal Mail for this access are fair and reasonable.
This is where the dispute between Royal Mail’s wholesale customers and the service arises. In July this year, Royal Mail announced that it would increase wholesale prices by an average of 25%.
While these increases were announced within the usual 30-day timeframe to provide fair warning for access operators, several of the affected companies have brought a dispute to Ofcom contesting the level of the price increases, especially considering wholesale price increases were also raised in January 2026.
The dispute, which was brought by the Mail Competition Forum, will be resolved by the regulator, which will determine whether the wholesale price rises constitute fair and reasonable terms as outlined in its rules.
Investigation into service delivery
Earlier this year, Royal Mail failed to meet its delivery targets, prompting another investigation by Ofcom into whether it was making sufficient progress towards achieving its obligations.
The company is obligated to meet minimum standards of delivery, and Ofcom said that its service levels have remained unacceptable.
In the year ended March 2026, Royal Mail only delivered 75.7% of its First Class mail the next working day – far short of its target of 93%. Additionally, Royal Mail is obligated to deliver 98.5% of its Second Class mail within three working days – it only managed 90.2% last year.
The regulator also noted that it took almost a year for the Royal Mail to begin implementing delivery reforms in line with the regulator’s targets.
