EU competition move causes revenue fears at An Post
Business & Finance: EU competition move causes revenue fears at An Post
Irish Times; Oct 17, 2001
BY CIARAN BRENNAN
An Post has expressed concern over European Union proposals to introduce full competition for letters and parcels weighing more than 100 grammes by 2003.
‘We have concerns about the proposal that, from 2003, all outgoing cross-Border mail will be open to full competition,’ said a spokeswoman for An Post.
‘That is an important revenue earner for us, more so than any other postal administration because we have so much more of it proportionally.’
She said An Post handled four times the European average for international mail.
Around 30 per cent of the mail that An Post handles is international, nearly two-thirds of it incoming, according to the spokeswoman.
Outgoing mail is a growing segment of An Post’s distribution business and an increasing source of revenue for the company.
The spokeswoman said An Post would be making representations to the Minister for Public Enterprise, Ms O’Rourke, on the issue.
‘We are a special case insofar as so much of our business is dependent on cross-Border mail,’ she said.
The proposals have yet to come before the European Parliament for ratification.
The proposal for 2003 is part of an agreement reached by EU telecommunications ministers earlier this week to increase competition in the postal sector over the next eight years.
In 2006 competition for letters and parcels over 50 grammes will be introduced, with complete liberalisation pencilled in for 2009.
The spokeswoman described the overall 2009 deadline for full competition as ‘workable’.
She said the issue of competition in the distribution and delivery services was different from that of the solvency of post offices.
‘The side of the house, which deals with post office and rural post offices, is completely separate from the side dealing with the liberalisation of the postal market.
‘It is all under the An Post umbrella but they are two distinct businesses,’ she said.
A report earlier this year said the State’s post offices were technically insolvent and would quickly become bankrupt without a change in the way they are funded.
It said the only real option for financing An Post’s losses was for the State to pay a subvention to the company.
The report said An Post could not reconcile its legal obligation to trade effectively with a Government directive to keep all 1,900 post offices open and added that An Post’s ‘preferred option’ was to close 1,500 sub-offices and maintain only 400 of its 800 automated outlets.
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