Finnish Transport and Communications Agency Traficom has granted government grants for newspaper delivery in areas that are left outside the commercial five-day early morning delivery of newspapers. The purpose of the grant is to ensure the five-day delivery of newspapers all across Finland. Traficom granted the government grants to delivery companies that committed to offer deliveries with the smallest grant amount.
The purpose of the government grants for newspaper deliveries are to create prerequisites for newspaper delivery on five business days each week in areas with no commercial early delivery network for newspapers and with no comprehensive five-day early delivery.
“Traficom has determined a maximum price that the delivery company can charge from the newspaper publishers. The purpose of the grant is to cover the net costs caused by newspaper delivery, meaning the part of the costs that is not covered by the delivery price charged from newspaper publishers”, the Communications Market Specialist Sami Vilvala clarifies. “The grant was available for 38 areas in total. The company that was chosen to receive the grant promised to deliver the newspapers covered by the grant on Tuesdays and Thursdays with the smallest grant amount. The applicant had to also fulfil the other terms and conditions of the grant”, Vilvala continues.
EUR 7 million of the government grant was granted to 18 areas across Finland
Traficom granted the government grant to 18 areas in Finland. Applications that met the terms and conditions for the grant were received for 18 areas, and of these, two areas had more than one application. The applicants consisted of four companies in total. Based on the lowest grant amount applied for, Posti received a positive grant decision in 17 different areas and the commercial name Jyrki Ruokamo in one area. No applications fulfilling the terms and conditions were received for the 20 grant areas in Lapland. For these areas, Traficom assigns Posti Distribution Ltd. a public service obligation under the Postal Act to secure a comprehensive newspaper delivery network.
Of the EUR 15 million reserved for the government grant, approximately EUR 7 million was granted now. The final grant amount is determined according to the actual costs incurred in fulfilling the service obligation. The final grant cannot exceed the sum defined in the grant decision. Additionally, Posti Distribution Ltd. can be reimbursed afterwards from the grant for the costs caused by the public service obligation imposed on the municipalities of Lapland. The final total sum is thus not yet known, but the goal of the continuity of a nationwide newspaper delivery service on its current level will be reached with the reserved grant amount. The government grant period for the grant now given begins on 1 October 2023 and ends on 30 September 2024.
The grant that secures newspaper delivery will be extended within the budget. The next grant period starts on 1 October 2024. “Before starting the next round of applications, we will collect experiences from different parties. Traficom monitors the effects of the government grants it gives on the market. The purpose is also to develop the grant model in such a way that it meets the goals of all parties involved as well as possible", Vilvala states.
Enquiries
Communications Market Specialist Sami Vilvala, tel. +358 295 390 624, sami.vilvala@traficom.fi
Senior Specialist Merja Saari, tel. +358 295 390 541, merja.saari@traficom.fi
Newspaper delivery government grant (in Finnish) (External link)
Background
The purpose of the fixed-term government grant for newspaper delivery is to create the conditions for the continuity of paper newspaper delivery throughout Finland. A total of EUR 15 million has been reserved for the government grant in the budget. The Finnish Transport and Communications Agency Traficom grants government grants in a selection procedure, where one delivery company is selected for each grant-eligible area.
The background for the government grant is the change in the Postal Act that will come into effect on 1 October 2023, which will change the postal universal service from the current five-day collection and delivery to three-day collection and delivery.
According to the Postal Act, Traficom can impose a public service obligation on the universal service provider, namely Posti Distribution Ltd., for the delivery of newspapers, if a grant area is left without a delivery company that meets the terms and conditions for the selection procedure and the public service obligation. Traficom can compensate the universal service provider for the costs incurred in implementing the public service obligation within the grant given for newspaper delivery, provided that there is some funds left. Costs will be reimbursed if they are not covered by fees collected from the publishers, which must be in accordance with the price level determined by Traficom.