Consignia accuses regulator over post shake-up
Consignia, the government-owned mail group, accused the independent postal
regulator yesterday of putting the postal system at risk in its plans for
introducing private sector competition. “The regulator seems intent on pursuing a course which risks undermining the
universal service to the UK’s 27m addresses at a uniform price,” said Stuart
Sweetman, Consignia’s group managing director for strategy. PostComm, the regulator, is consulting on how to introduce widespread
competition in line with the Postal Services Act, which took effect in March
removing the legal monopoly held by Consignia. The attack by Consignia,
formerly the Post Office, is aimed at heading off suggestions the regulator
might license private sector companies to compete with it in selected areas
such as large cities. The regulator is expected to approve a temporary licence for the Hays group
this month, which would allow it to collect and deliver mail overnight within
the business districts of London, Manchester and Edinburgh. Mr Sweetman said: “The regulator risks falling into the trap of assuming any
increase in competition will automatically be good for all customers. It will
be very easy to attract operators into the postal market if Post-Comm allows
them to undercut the basic 27p first class postage and cherry-pick mail with
low delivery costs. “PostComm appears to be encouraging this sort of competition. But if this is
the approach taken, the only customers to benefit potentially will be large
business mailers. Most customers will face dearer postage prices.” Consignia executives fear that private sector companies could offer local mail
services for as little as 10p per letter. Some say that up to 30 per cent of
the company’s market could be at risk. Consignia is arguing for an alternative approach, under which the regulator
would gradually reduce the so-called protected area, under which anyone
providing a postal service costing less than Pounds 1 is required to obtain a
licence. PostComm, which is expected to rule on the framework for competition
later this year, is known to see competition as the only way of improving
Consignia’s service standards. Page 4; Edition London Ed2; Section NATIONAL NEWS Copyright 2001: Financial Times Group FINANCIAL TIMES, 06th September 2001
