EU posts notice on Royal Mail monopoly

EU posts notice on Royal Mail monopoly

Andrew Osborn in Brussels and Geoff Gibbs
Tuesday October 16, 2001
The Guardian

Royal Mail could lose its near-monopoly on the delivery and collection of letters in the UK before the end of the decade following a EU deal struck in Luxembourg last night.
The company, already facing limited competition in the recently liberalised British postal market, will be forced to accept a wave of new rivals in 2003 and 2006 respectively after ministers from all 15 EU member states agreed to a phased-in abolition of national postal monopolies with a view to creating a harmonised EU single market in the sector.

Royal Mail’s parent company, Consignia, has warned that the changes could cost it up to £400m a year in lost revenues and threaten the concept of the universal service under which letters are delivered to addresses throughout the country at a uniform price.

At present Consignia enjoys a de facto monopoly in the collection and delivery of letters weighing up to 350 grams. Under the terms of last night’s deal monopoly thresholds across Europe will be reduced to 100g in 2003 and drop still further to 50g three years later. Consignia had been lobbying hard to limit the initial cut to 150g but refused to comment until it had had time to study the details of the agreement.

The European commission said it was delighted with the deal which it has been seeking to engineer since last year. It said it would draw up an impact study into the consequences of a total market opening in 2006.