Consignia Unloads Sweden's CityMail

— Mary Fagan, the Sunday Telegraph (London): “Consignia, the stricken Post Office group, has given away a controlling stake in Sweden’s CityMail, which it bought for £20m less than two years ago. Consignia, which is losing up to £1.5m a day, never made any money on the investment in CityMail, the major competitor to the state-owned Sweden Post. News of the loss will stir up fresh criticism of the group’s management. Consignia insiders say Sweden Post’s aggressive pricing policy after competition was introduced meant rivals were squeezed and the investment was much less lucrative than expected when it bought the 67 per cent stake in CityMail. The acquisition was part of a Post Office plan to expand into Europe. Consignia has used an analysis of the Swedish market to argue that its ability to provide a universal postal service will be threatened if plans to introduce competition in the UK market go ahead. As revealed in the Sunday Telegraph, the company claims that the price of a first class stamp could rise to 40p and second class to 30p unless the proposal to open the market from April this year is changed. But after five years of competition, the Swedish market is still dominated by Sweden Post. However, Consignia will argue that its counterpart was given much more freedom in its pricing and had a lighter regulatory regime.”