Casey to Postal Service: Consider Impact On PA Businesses of Special Discount For Valassis Before Approving Deal

USPS Is Considering Deep Discount for Coupon Company - Could Undermine PA Companies That Survive on Advertising Dollars

WASHINGTON, DC –U.S. Senator Bob Casey (D-PA) is urging the United States Postal Service (USPS) to consider the impact that an additional mailing discount for coupon advertiser Valassis Communications would have on Pennsylvania business before moving forward.

Valassis is currently asking USPS for a 22% to 36% discount on certain coupon packages. If approved, the additional discount could undercut Pennsylvania businesses that depend on advertising revenue.

“Businesses that employ thousands of Pennsylvanians could be seriously undercut if the USPS goes forward with this discount for Valassis without considering the impact on businesses,” Senator Casey said. “Pennsylvania businesses that depend on advertising for revenue have already been strained in this tough economy, and an additional discount for Valassis could only deepen the problem.”

USPS is in the process of considering a Negotiated Service Agreement (NSA) for Valassis Communications which would reduce the mailing cost of certain of the company’s coupon packages by 22%-36%. If approved, the discount could undercut Pennsylvania businesses that depend on advertising dollars.

The full text of Senator Casey’s letter to  can be seen below:

The Honorable Ruth Y. Goldway

Chairman

Postal Regulatory Commission

Dear Ms. Goldway:

I am writing in regard to the Negotiated Service Agreement (NSA) recently proposed by the United States Postal Service (USPS) for Valassis Communications, Inc.  I understand that this agreement would allow Valassis to pay postal rates that are significantly lower than the standard rates.  I have concerns about the potential impact of this arrangement and ask the USPS to carefully weigh the potential harm to other businesses.

It is my understanding that this NSA proposes to give Valassis a 22 to 36 percent discount on certain new advertising accounts, substantially lowering their costs as compared to their competitors when pursing advertising contracts.  As I am sure you are aware, newspapers nationwide rely on advertisers as a primary source of revenue.  With many newspapers struggling in the face of changing technology and a difficult economy, granting their competition a market advantage could further harm their businesses, and potentially lead to layoffs or even closures. 

I ask that you please evaluate the impact on these businesses when considering the pending NSA.  This contract should not benefit the USPS and a single company at the expense of numerous others. 

Sincerely,

Robert P. Casey, Jr.

United States Senator

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