Post Office stranglehold is 'unfair on small firms' Businessman accuses mail chiefs of abusing monopoly in race to maximise profits
The fact that it will cause inconvenience and expense is of no
consequence to the Post Office’
THE Post Office has been accused of abusing its monopoly on delivery services
after closing a Westcountry firm’s long-standing account for failing to spend
enough money on posting its mail.
Alex Hammerstein was amazed when he was told a 12-year agreement between his
firm and the service allowing him to pay for postal deliveries on account was
being cancelled because he had not met a minimum volume threshold.
As a result, Mr Hammerstein, managing director of Modbury Marketing Computer
Services, was told he would have to make costly alternative arrangements for
mailing out thousands of letters each year.
Mr Hammerstein’s firm, which develops and markets resource material for
schools across the country, has held a Royal Mail standard letter tariff
account since 1989.
The account permits Mr Hammerstein to be billed monthly for post collected and
delivered by the Royal Mail.
Earlier this month, Post Office officials informed Mr Hammerstein that they
were closing the account as he had failed to post a minimum spend of £5,000
per annum.
He was also told that the minimum spend enforcement was being made on all
businesses with accounts across the Post Office’s services.
He believes that Post Office bosses are neglecting the needs of small
businesses in their race to maximise profit prior to future privatisation.
“It seems clear to me that the Post Office no longer wishes to deal with
businesses that spend less than the minimum limit on any of their services and
below which they believe they are uneconomic to run,” he said.
Mr Hammerstein was told he would now have to order stamps via the Internet
and be billed through direct debit.
Alternatively, he could invest in an expensive franking machine or purchase
sheets of stamps over the counter. “The fact that many small businesses all
over the country will now have to change their systems, invest in franking
machines and suffer inconvenience and expense is of no consequence to the Post
Office board,” Mr Hammerstein said.
“It will involve the Post Office in a far greater administration burden, with
increased delivery costs and a far higher number of direct debits being
processed than the current system.”
The Post Office decision had ramifications for small firms throughout the
country, especially those in remote, rural areas, said Mr Hammerstein.
“Given our location, we are naturally aware of the problems faced by small
businesses in rural locations,” he said.
“This will affect the businesses based in rural areas and do not have a local
post office where they can buy stamps or post their letters. On an average
Wednesday, our mail would quite simply fill all of the letterboxes in our
area.”
Ian Handford, chairman of the National Federation of Small Businesses,
described the Post Office’s decision to close Mr Hammerstein’s account as
“barmy”.
“It utterly ridiculous that the Post Office is able to treat firms like this,”
he said. “It is still a monopoly and businesses rely on it. It doesn’t make
sense in a modern society for any business to treat its customers like it has
in this situation.”
ALEX HAMMERSTEIN: Left high and dry by Post Office
WESTERN MORNING NEWS, 22nd February 2001
