Royal Mail hatches plan to buy mail houses

Royal Mail is understood to be involved in top-level negotiations with
at least half a dozen mailing houses around the UK, as part of plans to
buy into the sector. The strategy is believed to be part of Royal Mail’s
aggressive drive to boost its commercial ventures. The news follows the warning issued by Adam Novak, managing director of the media markets division, that its
involvement in the controversial Postal Preference Service was “only
the beginning” (PM, December 11 2000). The move is likely to spark uproar
throughout the direct marketing industry which fears below-cost pricing. One industry source says:
“There are 24 independent mailing houses left in this country, as
larger firms have swallowed the smaller ones. “If Royal Mail goes ahead
with this, it means the organisation will become a monopoly supplier.” A spokesman from consumer watchdog Postwatch says: “Royal Mail will
need to charge its mailing house customers the same rate as other
mailing houses, otherwise it would be abusing its monopoly through
discriminatory pricing.” A Royal Mail spokesman refused to comment on the
move. Copyright: Centaur Communications Ltd. and licensors Page : 1PRECISION
MARKETING, 13th April 2001