Tag: Europe

Allan Leighton, Royal Mail chairman, has accused the postal regulator of “Monty Pythonesque” behaviour after it slapped a Pounds 2m fine on the company. The decision by Postcomm followed an 14-month investigation into complaints from three rival operators that the state-owned company appeared able to exploit its dominant position to gain “an unfair commercial advantage”. The regulator said Royal Mail had failed to set up so-called “Chinese walls” between its various business areas to prevent conflicts of interest. Nigel Stapleton, Postcomm chairman, said: “Competition is starting to offer a better deal for customers but, given Royal Mail’s dominant position, the full benefits will never be felt unless the playing field is made as level as possible for the new operators. “We cannot allow any actions by Royal Mail that unfairly keep competitors out of the market.” But Mr Leighton hit back: “This is a shoddy report from a grandstanding regulator who is looking to micro-manage the entire postal industry. It is full of unsubstantiated and subjective views which are not based in fact. This huge and arbitrary penalty is illogical,” he said. “It is regulation for the sake of regulation. This is almost Monty Pythonesque.”

Postcomm’s review of PAF has split industry opinion. While many recognise its financial importance to Royal Mail, others fear a repeat of the ‘fiasco’ which followed the deregulation of directory enquiries. Regulator Postcomm’s decision to start a full-scale review of Royal Mail’s Postal Address File (PAF) has sparked major debate in the industry. One side says ‘about time’; the other ‘why now?’. Originally created by Royal Mail to help postal delivery, the file – updated quarterly – has long since been adopted by businesses as a tool to locate, verify and clean customer addresses, and aid marketing. It is also used extensively within geographical information systems (GIS) to draw up location analyses. However, criticism is never far away. More than 12 years ago, the industry was in uproar after Royal Mail terminated all licence agreements with PAF bureaux and forced them to sign new contracts. Price rises of up to 250 per cent ensued. Meanwhile, the current review has been sparked, in part, by a rash of complaints over unfair pricing, and concerns that Royal Mail could exploit its monopolistic position.