DMA slams ‘farcical’ UK postal price controls

The DMA (UK) has hit out at Postcomm’s proposed four-year price control scheme for Royal Mail, branding the regulator’s plan to measure quality of service “farcical”.

The trade body, which also questions why mailing clients should be forced to pay for Royal Mail’s pension deficit, has submitted its response to Postcomm’s consultation.

The new pricing scheme is set to come into force in April 2006, but the trade body believes it needs further scrutiny. The DMA’s submission highlights at least 12 major areas of concern, including the need to give users real price reductions, the introduction of competitive tests for new products, and industry fears over the postal operator’s compensation scheme.

It also calls for Postcomm to be wary of Royal Mail introducing substitute products, instead of new ones, as these will be exclusive of price controls.

David Robottom, director of postal affairs and industry development at the DMA, explains: “Price control is a complex issue that needs to be fully understood. We believe Postcomm must be wary of customer expectations of lower prices once the market opens, as they aren’t likely to change much. The plan to group products for quality of service is farcical.

“Royal Mail’s pension deficit is set to be met by users under the consultation, and we believe this is wrong. The responsibility should fall on Royal Mail and the Government, not users.”

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