NZ Post rivals step up protest

By DANN Liam Competitors crying foul take their complaints to commerce
minister
Liam Dann
COMPLAINTS of anti-competitive behaviour against NZ Post are growing
as two more independent mail services close and two survivors take
their case to the government. Following the collapse of National Mail,
Today's Post in Nelson and
Smart Post in Whakatane have closed. Franchise operator Pete's Post has
plans to expand to Auckland in
the next few weeks but owner Murray McBeth said the company had been
hit hard by NZ Post's aggressive tactics. As well as a complaint by
National Mail, the Commerce Commission is
investigating a case lodged by Pete's Post. Since the industry was
deregulated in April 1998 the commission has
had 13 complaints about NZ Post over network access,
anti-competitive pricing and predatory pricing. None have been
upheld. Frustrated with lack of progress by the commission, Brian Plimmer
of
the rural delivery group Coural has organised a meeting with
Commerce Minister Paul Swain on April 24. He plans to push for the
establishment of an industry regulator similar to that being set up
for the telecommunications industry. Commerce Commission spokesman Vincent
Cholewa said the two current
complaints were taking several months to resolve because they were
complicated. NZ Post general manager of letters Robert Lake denied the
company
had been acting in an anti-competitive way. The complaint by Pete's Post,
a franchise-based business with
operators in Wellington and regional centres, relates to NZ Post's
refusal to deliver mail to Pete's Post private bags or to allow it
discounted access to its own PO Box address. When Pete's Post collects
mail which is destined for a PO Box
address it has to pay for a full price 40c NZ Post stamp to get
access to the box. As Pete's Post charges customers 35c for national
deliveries it has no choice but to make a loss if it wants to keep
that customer's business. But when Pete's Post tried to set up its own
private bag service
they found letters received by NZ Post were being returned to sender
as "address unknown" even though NZ Post was aware of Pete's Post's
existence. "Because of their dominance we can't offer our customers
a Pete's Post address," McBeth said. As well as the issue of fair access,
NZ Post was breaching its
charter by not offering the best available price to all its
customers, he said. McBeth was aware of NZ Post offering discount
prices to certain customers. Lake said NZ Post never practised predatory
pricing and that he did
not consider its tactics to be aggressive. It offered discounts
based on specific criteria. Attempts to reach an agreement with Pete's
Post had failed because
the deal it had offered was not commercially viable for NZ Post. Because
Pete's Post had to use NZ Post to get letters to centres
where it didn't have franchises operating, it was easy for NZ Post
to work out which customers it had lost and target them with big
discounts, McBeth said. He claimed NZ Post had one employee whose main job
was to monitor
the activities of competitors. Lake confirmed he did have an employee
acting in an "intelligence"
role but said that this was standard business practice. McBeth said his
company had also suffered because of the negative
publicity surrounding National Mail's closure. The two services had
shared mail boxes and when they closed many people assumed Pete's
Post had closed as well. But the the company aims to have 12
franchises in Auckland within the next year. Since National Mail closed in
December, it has already opened one
franchise in Gisborne taking the total to 12. Pete's Post averaged a 10%
market share across all the regions it
operated in. This was all it needed to be profitable, McBeth said.
It has franchises in New Plymouth, Wellington, Tauranga, Wanganui,
Palmerston North, Taranaki, Gisborne and Hamilton. The new Auckland
franchises will initially focus on registered
parcel delivery. But it will deliver Pete's Post mail and will eventually
add a
general mail collection service. Brian Plimmer said his attempts to run a
rival rural delivery
service in the Palmerston North region had also been hampered by
unrealistic pricing by NZ Post. It was hard to work out why NZ Post was
taking such an aggressive
stance given, it had claimed rural deliveries were unprofitable and
tried to drop them in some areas, he said. Many attempts had been made to
reach an interconnect agreement with
NZ Post but all had failed, he said. Plimmer has organised the meeting
with the minister to try to lift
the issue above Commerce Commission level. According to rules set down at
the time of deregulation, there was
supposed to be a review of the deed between the government and NZ
Post on February 17 but there has been no announcement of this. Larry
Sutherland started Today's Post in Nelson's Richmond when he
saw a niche for a service which picked up mail from local
businesses. To his dismay NZ Post decided to start an identical service in
Richmond. The NZ Post service was not offered nationally. It claimed
it was being run in the area on a trial basis, Sutherland said. His
business shut down after 10 months. NZ Post recently announced a December
half-year profit of $22.4
million – up from $21.1 million for the same period last year –
although it has acknowledged mail volumes are falling.
Copyright 2001 Independent Newspapers Limited.
Source: World Reporter (Trade Mark).SUNDAY STAR TIMES, 01st April 2001