The Finnish Transport and Communications Agency Traficom has awarded discretionary government grants for the delivery of newspapers in areas where there is no commercial five-day early delivery service. Thanks to these grants, five-day newspaper deliveries will remain possible throughout Finland, also in sparsely populated areas. The discretionary government grants were disbursed to delivery companies that undertook to offer deliveries meeting the conditions for the lowest grant amount.
Following an amendment to the Postal Act, five-day delivery service as part of universal postal services was replaced with three-day delivery service from 1 October 2023. Fixed-term discretionary government grants for newspaper deliveries were introduced as a consequence of this amendment.
"The purpose of the grant is to make it possible for Finnish people to receive their newspapers five working days a week, also in areas where commercial deliveries are not feasible," says Sami Vilvala, Communications Market Specialist. This was the second time one-year government grants aimed at supporting newspapers deliveries were up for application.
Improved possibilities for deliveries in Lapland
During the first grant period, Traficom asked operators about their views of how the grant model should be developed. Based on the feedback received, the time limit for grant-supported deliveries was changed: in Lapland, newspapers must be delivered by 18:00, whereas the time limit in the rest of the country is 16:00. The purpose of this was to improve the operating possibilities for grant-supported deliveries also in Lapland.
Government grants for 38 regions - Posti Jakelu Oy as the largest beneficiary
Traficom awarded government grants to a total of 38 areas around Finland for the grant period starting on 1 October 2024. Applications were received from five companies. "For each grant area, we chose an operator who committed to offering the delivery of the listed newspapers on Tuesdays and Thursdays, the days on which there are no deliveries as part of the universal service, for the lowest grant amount," explains Senior Specialist Tero Ilvonen. Grants for 42 areas across the country were up for application.
Posti Jakelu Oy was awarded a grant for 35 areas, which makes it the largest beneficiary. Hilla Logistiikka Oy received a grant for one area and Kaleva365 Oy for two areas in Finland. No applications were received for four grant areas in Lapland, which is why Traficom imposed a public service obligation referred to in the Postal Act on Posti Jakelu Oy in these areas. "It is important to secure a comprehensive distribution network for newspapers and to ensure that newspapers are delivered everywhere in Finland," stresses Mari Österberg, Head of Services.
Traficom has set a maximum price that a delivery company can charge to newspaper publishers. The purpose of the grant is to make up for the part of the delivery costs that the price charged to newspaper publishers does not cover.
Around EUR 7 million of the EUR 15 million appropriation reserved for these grants has now been disbursed.
Enquiries
Tero Ilvonen, Senior Specialist, tel. +358 295 346 105, tero.ilvonen@traficom.fi
Niko Kaarela, Specialist, tel. +358 295 347 370, niko.kaarela@traficom.fi
Sami Vilvala, Communications Market Specialist, tel. +358 295 390 624, sami.vilvala@traficom.fi
Discretionary government grants for newspaper deliveries (in Finnish) (External link)
Background
The purpose of the fixed-term discretionary government grant for newspaper deliveries is to maintain preconditions for continued deliveries of printed newspapers throughout Finland. A total of EUR 15 million was reserved for the grants in the budget. The Finnish Transport and Communications Agency Traficom awards the grants in a selection procedure in which one delivery company is selected for each eligible area.
The grant is paid in two instalments. The first 50% of the grant is paid after the decision has been made, while the remainder is disbursed at the end of the grant period once the beneficiary has submitted to Traficom a report on the costs incurred from the newspaper deliveries. While the final grant amount is determined on the basis of the actual costs of fulfilling the public service obligation, an upper limit for the amount to be paid is set in the grant decision. The funding reserved for the grant may, within the limits of the appropriation, be used to reimburse Posti Jakelu Oy in arrears for the costs incurred from the public service obligation imposed on the company in Lapland municipalities. The grant period of the grants awarded on this round begins on 1 October 2024 and ends on 30 September 2025.
The backdrop to these government grants is an amendment to the Postal Act that entered into force on 1 October 2023, as a result of which five-day collection and distribution of mail that was previously part of the universal postal service was replaced by a three-day service.
Under the Postal Act, Traficom may set a public service obligation for a universal service provider, in other words Posti Jakelu Oy, to deliver newspapers if no delivery company that meets the selection procedure criteria can be found for an area and the requirements for imposing a public service obligation are met. Traficom may reimburse a universal service provider for the costs incurred from fulfilling the public service obligation within the limits of the appropriation allocated to government grants for newspaper deliveries, provided that some funds remain. The costs are reimbursed to the extent that they are not covered by fees charged to publishers, which must comply with the price level set by Traficom.