Daniel Kretinsky: I can’t make promises on Royal Mail stamp prices

The would-be owner of Royal Mail Daniel Kretinsky has refused to rule out further price hikes for first class stamps.

The billionaire – nicknamed the ‘Czech Sphinx’ – has suggested costs could continue to spiral in 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 increase the unit price and hope that people will pay for it,’ he told The Sunday Times.

He added: ‘Because if not, you are making losses. You can be lossmaking for a year or two, but you can’t be in a loss for 20 years. It’s simple maths.’

It comes as Royal Mail has periodically increased the cost of stamps to counter weaker demand and spiralling losses.

The price of a first-class stamp has risen from 67p in 2018 to £1.35 today.

Last week Royal Mail’s parent company, International Distribution Services, accepted a £3.6billion offer from Kretinsky after he made a series of commitments, including promises on jobs and the UK-wide six-day service.

By law, the 508-year-old company must deliver letters six days a week, at the same price. It must also deliver parcels on five days. But results show Royal Mail is losing around £1m a day in an effort to meet these targets.

However, ministers have expressed their concerns about the tycoon. Chancellor Jeremy Hunt said regulators should look ‘very carefully’ at pledges made by Kretinsky, such as the promise to not split up its parent company. The billionaire has acknowledged ‘the intuitive concern’ about a foreign entity swooping on Royal Mail.

‘Any foreign moment is something that is irritating.’ But Kretinsky said he is ‘convinced that we will help the company.’ IDS shareholders will vote on the deal at its annual meeting in September.