'Open Post' will hurt Consignia

CONSIGNIA will say this week that liberalisation of the British and continental postal markets will take Pounds 750m a year off operating profits from 2006.

The bleak forecast will be contained in Consignia’s submission to Postcomm, the postal regulator. The group, which is losing Pounds 1.5m a day, is expected to say changes in European regulation will cost it Pounds 500m a year.

From next January, the European Union has said the delivery of all mail weighing more than 100g or costing more than three times the price of a standard letter will be open to competition. In January 2006 the weight limit will be reduced to 50g.

Postcomm proposals will cost a further Pounds 250m a year, Consignia will say. Postcomm intends shortly to issue licences for delivery companies to handle batches of mail above 4,000 items. From April 2004, it wants to force open a further 30% of Consignia’s market by licensing bulk deliveries above 500 items.

Postcomm has received thousands of submissions for licences ahead of the closing date this Friday