Tag: Domestic

Rentokil chief delivers City Link blow

Posted by | Apr 23, 2008 | |

Rentokil Initial’s new chief executive has warned that its troublesome City Link parcel delivery business will make a “significant” loss this year and that turning round the rat-catching group is a three- to five-year job.

Alan Brown, one of the trio of ex-ICI managers appointed last month to run the business after the ousting of chief executive Doug Flynn, denied that just three weeks after joining he was “kitchen-sinking” City Link. “It would have come up whoever was running this business,” he said.

Having previously said City Link “may not trade better than break even for 2008”, Rentokil warned: “It now appears likely that the division will incur a significant full-year loss.”

Operating losses at City Link totalled GBP 16.9m in the first quarter, including GBP 10m of non-recurring costs for compensating customers and replacing management.

Analysts cut operating profit forecasts for the group from around GBP 246m to GBP 198m. Rentokil is believed to expect City Link to lose GBP 38m-GBP 40m this year. Even so, the shares rose 2½ to 97½p after Mr Brown gave what one analyst described as a “brutally honest” assessment of the problems at City Link – whose two profits warnings triggered Mr Flynn’s departure.

Mr Brown, who has ruled out breaking up Rentokil, can make more than GBP 30m if he can lift the shares to GBP 280m in three years.

He said the turnaround was “a three- to five-year programme. I’ve seen worse. Unilever China was worse than this.”

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Does a liberalized postal market need a sector specific regulator?

Posted by | Apr 22, 2008 | |

For different reasons, most actors in liberalized postal markets call for sector specific regulatory bodies. However those should disappear over time along with an increasingly market-oriented definition of universal services.

Sector specific regulation in the postal sector has rarely been questioned so far. However, with the total opening of the European market now foreseen between 2011 and 2013, and in some countries already in place, we should think again.

To recall the context, specific regulation in the postal sector is an invention of the European Community back in 1997. The regulation was a copy of what at that time had already been set up for the telecommunications sector. Indeed the Postal Directive (97/67/EC) required every member country to set up a postal regulator. The regulator’s main functions were: firstly to make sure the Universal Service Obligation (USO) and corresponding quality criteria are fulfilled; and secondly to watch on possible cross-subsidies resulting from the monopoly, which in turn was designed as a means to finance the USO.

Abolition of postal monopoly

With the new Postal Directive of the European Community (2008/6/EC), the monopoly will be abolished in 2011 with exceptions granted to some member countries in 2013. Finland, Germany, Sweden and the United Kingdom have already abolished (at least de jure) their monopoly protection, while the Netherlands delayed full market opening because of continuing barriers to entry in Germany. Outside the European Union, Switzerland might open its postal market completely to competition by 2012, while Canada thinks on deregulating outbound mail.

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Strategic Review of Canada Post Announced

Posted by | Apr 22, 2008 | |

Lawrence Cannon, Minister of Transport, Infrastructure and Communities, and Minister responsible for Canada Post, today announced that the Government of Canada will conduct a strategic review of the Canada Post Corporation that will be guided by established terms of reference. “We are conducting a strategic review of Canada Post to make sure this public institution has the right tools and means to fulfil its mandate in the future,” said Minister Cannon. “This review is being conducted with the full understanding that Canada Post will remain a Crown corporation. In the changing business context and with new challenges ahead, we want to act now to make sure it continues to fulfil its mandate: delivering essential, universal services every day to Canadians, while remaining financially self-sustaining.” The review will focus on four major areas: market and competition; public policy objectives and responsibilities; commercial activities; and financial and performance targets. A review of Canada Post has not been conducted since 1995. The review will be led by an external, independent advisory panel composed of three members. “I am very pleased that Dr. Robert Campbell has agreed to chair the panel and that Mrs. Nicole Beaudoin and Mr. Daniel H. Bader will support him as panel members on this important review,” said Minister Cannon. “I look forward to their report and recommendations, which are due to me in December 2008.”

The panel will be guided by the following four principles:
– Canada Post will not be privatized and will remain a Crown corporation;
– Canada Post must maintain a universal, effective and economically viable postal service;
– Canada Post will continue to act as an instrument of public policy through the provision of postal services to Canadians; and
– Canada Post will continue to operate in a commercial environment and is expected to attain a realistic rate of return on equity.

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E-BOX is condemned by the TGI of Paris but it is La Poste which appeals

Posted by | Apr 22, 2008 | |

La Poste initiated a legal action against E-Box on 6 June 2006 and requested the cancellation of trade marks arguing the similarity to La Poste brands and claiming it could create confusion to the consumers. La Poste also requested EUR 215,000 for compensation.
On 11 March 2008, after 2 years of legal procedures, the Court of Justice issued its decision (This sentence is provisional since one of the parts can still appeal):

The tribunal:
– Condemns E-BOX for counterfeiting by imitation of the following brands: ’agence postale rapide ebox’’, agence postale jaune’’, agence postale orange’’,’’agence postale erte’’, ‘’point poste jaune’’, ‘’point poste orange’’, and ‘’point poste vert’’. E-BOX must pay to La Poste EUR 20,500.
– Declares inadmissible the counterclaim of EBOX against La Poste

In revenge the tribunal:
– Don’t approve the nullity of the ’agence postale rapide e-box’’ brand
– Declares the validity of the following E-BOX brands: ‘’post ebox’’, “e-box, l’ autre poste’’, et ‘’e-box, une autre idée de la poste’’.

La Poste decided to appeal to this sentence.

La Poste group announced the objective to EUR 850 million net profits for 2008. Even if E-Box “contribution” passed from EUR 20,000 to EUR 215,000, it will remain marginal in the accounts of La Poste.

Therefore, the action of the La Poste only aims to ensure the monopoly of the words “poste”, postal’, ‘postale’, ‘agence postale’ and seek to preserve the monopoly of the postal services in France.

Can be possible a healthy competition in the French postal market, where ARCEP is the regulator and guarantor, if the services suggested by competitor operators of La Poste cannot be understood by the consumers as being of postal nature?

By collateral effect, the continuation of legal actions from La Poste give value to E-BOX trade marks containing the word ‘poste’. But E-Box’s interest is to support the implementation of the European directives related to the liberalization of the postal markets and the creation of a competition model.

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Postcomm – financial penalties

Posted by | Apr 18, 2008 | |

Postcomm has revised its statement of policy in relation to financial penalties (‘statement of policy’).

Under the Postal Services Act 2000, Postcomm has the discretionary power to impose a financial penalty on a licence holder that has contravened – or is contravening – one or more of its licence conditions. Postcomm must prepare and publish a statement of policy, in relation to imposing a penalty and the amount of that penalty.

Postcomm published its current statement of policy in February 2002. Since then, Postcomm has imposed four financial penalties on Royal Mail and there have been a number of significant changes in the postal services market, including the full opening of the market in January 2006 and the adoption of a new price control for Royal Mail in April 2006. Postcomm said, at the time the statement of policy was introduced, that it would consider revising the statement in the light of experience in its application. Postcomm decided that it should consult on revising its statement of policy.

The consultation document was published on 8 August 2007 and sought views on a proposed revised statement of policy.

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