Business Post strikes new blow to Royal Mail with demand for split
One of Royal Mail’s rivals is to petition the Government to break up the state-owned postal group, in an escalation of pressure for change from its competitors.
Business Post made the call as sales at its mail division, which competes with Royal Mail, rose 59 per cent. The company argues that last month’s Royal Mail strikes have made more people aware that there is a competitive postal market.
Guy Buswell, Business Post’s chief executive, is to make a formal request to the Department for Business for Royal Mail’s network to be separated from its sales operation in January. By then it intends to produce a detailed paper with outside consultants.
Mr Buswell said: “The Government must be wondering what to do with Royal Mail. If the network were separated from sales, it would end the questions of what is Royal Mail’s future. We want to help start the debate.”
The call for change will come as the term of Allan Leighton as chairman draws to a close. The Government could use the change to make substantial changes. Rivals want the business to be split so that there is no conflict of interest between Royal Mail’s sales operation – their competitor – and its network, which they have to use for the final mile of the delivery of post.
The postal regulator is considering the implications but has no powers to order a split. Royal Mail may offer to present separate sets of accounts, but that is unlikely to satisfy its rivals.
Business Post said yesterday that sales at its UK Mail operation had leapt 59 per cent to GBP 60 million for the half-year ending in September and overall profits had risen 50 per cent to GBP 4.8 million. Sales at its mail operation rose after it won a number of high-profile customers, including Abbey, HBOS and Virgin Media.
Mr Buswell said: “In terms of getting known, the strike has helped us a lot because people are aware there is competition. Small businesses, in particular, are showing more interest.”
