Industry maintains deal for direct mailer is unfair

The U.S. newspaper industry is rallying together to oppose a plan by U.S. Postal Service to give one of the nation’s largest direct-mail companies a discounted rate on mailing advertising.

The Postal Regulatory Commission is expected to decide by Thursday whether to approve the proposed agreement between Valassis Direct Mail and the Postal Service.

The federal mail service is pushing for the agreement as a way to boost its own revenues, but critics, such as the Newspaper Association of America, are arguing the agreement would give direct-mail companies an unfair advantage that would sharply undercut newspaper advertising.

“Since the days of Ben Franklin, the first U.S. postmaster as well as a newspaper publisher, there has been a strong tie between the U.S. Postal Service and America’s newspapers,” said Caroline Little, president of the association. “But publishers are shocked by the specifics of this special deal for the largest direct-mail company. The proposal to provide steep discounts to a major newspaper competitor is a dagger aimed at the financial wealth of newspapers.”

At stake are the profitable advertising “inserts” that major retailers, such as Sears and Home Depot, like to send directly to customers.

Under the proposed agreement, Valassis would be getting a significant discount — estimated between 20 and 36 percent — on any increase in its mailings.

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