Tag: Postwatch

Postwatch, the watchdog for postal services, welcomes regulator Postcomm’s proposal to fine Royal Mail GBP2.16m for failing to tackle structural weaknesses that could give the company an unfair commercial advantage over its competitors. Commenting on the proposed fine, Gregor McGregor, Chief Executive of Postwatch, said: “Having only been opened up to full competition last month, the postal market is immature, but developing rapidly. Building customer and competitor confidence and ensuring a level playing field are essential if the UK postal market is to flourish. It was essential that Postcomm take action to protect the competitive market and we are pleased it has. It is now up to Royal Mail to put in place internal structures that prevent competitors’ commercially sensitive information being used to gain unfair advantage. The amount of the fine is very much a matter for Postcomm’s judgement. Any fine has to be substantial enough to ensure Royal Mail take the action required. Postwatch would expect any future fines for anti-competitive behaviour to be substantially bigger.”

The Royal Mail was hit by a huge GBP11.7 million fine today over the loss or late delivery of millions of letters. The financial penalty, on top of a previous fine of GBP7.5 million, was imposed by the industry’s regulator Postcomm, which accused the postal group of “serious breaches” of its licence obligations. Consumer group Postwatch said it supported the “tough stance” taken against the Royal Mail, but maintained that the fine should have been higher. The Royal Mail announced that it would appeal against the fine, which it described as “unfair”. Postcomm Chairman Nigel Stapleton said: “Customers are entitled to expect that when they post mail, it will reach its destination.
Royal Mail is a large and highly decentralised organisation and it is essential there are controls in place to ensure that procedures for protecting mail are being followed across the company.”

The watchdog for postal services was today urging the industry regulator to fine the Royal Mail more than the proposed GBP11.7 million over the amount of post which is lost, stolen or damaged, and poor performance in areas of London.
Postwatch has argued that Postcomm’s proposed financial penalty should be increased to GBP26.85 million – 5% of the Royal Mail’s operating profit in 2005 – to send a firm message to the postal service. The proposed fine represented 2% of the Royal Mail’s operating profit last year and included a penalty of GBP271,000 for poor delivery across three London postcode areas – SE, WC and E – where two million letters were delivered late during 2004/5.
Postcomm said it had uncovered some “serious” shortcomings in 2004/05, when 14.6 million letters, packets and parcels were lost, stolen, damaged or interfered with. Postcomm said the Royal Mail appeared to have improved its performance “substantially” as a result of its review but the regulator added that it could not ignore the “serious failures” to observe important parts of its licence obligations.

Royal Mail has three weeks to appeal against a High Court judgment which found it be in breach of its own compensation scheme, or it will be forced to pay more than GBP50m to disgruntled bulk mailers. Industry watchdog Postwatch brought a judicial review against industry regulator Postcomm when Royal Mail withheld around GBP40m-worth of compensation from companies after failing all 15 of its minimum service targets in 2003 and 2004. Bulk mail customers should have automatically received compensation totalling GBP80m, but Royal Mail used late invoice payments as a reason to withhold 50 per cent of that. A Royal Mail spokesman says: “We will be carefully studying the full written judgment. But we expect to ask for leave to appeal against the ruling. It is too early to say what impact the ruling will have on our business with bulk mail customers.”