Postal reform won‘t deliver a truly competitive market
Comment on UK postal reform by John Blundell, director general of the Institute of Economic Affairs.
Read MoreTag: Europe
DX hopes ‘take-all’ proves a winner
DX Services, the business mail group, said it was well- positioned to take advantage of full deregulation of the mail sector as it reported flat preliminary results for its first year since demerging from Hays, the recruitment company. The company expected to launch in November a “take-all” service that will collect all mail. At present, users have to post items to non-business customers separately, via the Royal Mail. There was little explanation for the resignation of Peter Brougham, chief executive, in mid-August but it was understood that some shareholders had been unhappy about the group’s strategy.
Read MorePublishers to compete with Deutsche Post
Three of Germany’s largest newspaper groups are joining forces to create what they say will become the largest competitor to Deutsche Post once the country’s postal market is fully opened to competition in 2008. Axel Springer, the publisher of the mass-market Bild tabloid, is teaming up with Georg von Holtzbrinck, publisher of the weekly Die Zeit and financial paper Handelsblatt, regional newspaper group WAZ and a private equity group from Luxembourg to set up a letter delivery group. The company, which will be run by Gunter Thiel, an experienced logistics manager, is aiming to increase its sales from an expected Euros 100m (Dollars 124m) in 2006 to Euros 1bn in 2010 by eating up market share of the former monopoly. It is the second group in a week to say it would enter the postal delivery market following Otto-Versand of Hamburg. Others are expected. The combination of three such powerful media groups – with total sales of more than Euros 6bn – highlights the attraction of a liberalised German market and illustrates why Deutsche Post has in recent years tried so hard to expand internationally and into new areas.
Read MoreSecond bank rules out joint venture with An Post
Another bank has ruled itself out of a joint venture with An Post for a new banking service. An Post is currently accepting expressions of interest from potential joint venture partners, but Permanant TSB has already ruled itself out. Yesterday Danske Bank said it would not be submitting an expression of interest either. Danske, a Danish company,owns National Irish Bank (NIB) and a spokesman said the bank was concentrating on building up its market share. It hoped to introduce a new range of online bank accounts and mortgages shortly. Banks from Ireland and overseas have until September 19th to submit an expression of interest.
Read MoreDMA slams ‘farcical’ UK postal price controls
The DMA (UK) has hit out at Postcomm’s proposed four-year price control scheme for Royal Mail, branding the regulator’s plan to measure quality of service “farcical”. The trade body, which also questions why mailing clients should be forced to pay for Royal Mail’s pension deficit, has submitted its response to Postcomm’s consultation. David Robottom, director of postal affairs and industry development at the DMA, explains: “Price control is a complex issue that needs to be fully understood. We believe Postcomm must be wary of customer expectations of lower prices once the market opens, as they aren’t likely to change much. The plan to group products for quality of service is farcical.
“Royal Mail’s pension deficit is set to be met by users under the consultation, and we believe this is wrong. The responsibility should fall on Royal Mail and the Government, not users.”
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