Tag: Royal Mail

Charities fear reduced income due to postal strikes

Posted by | Jul 30, 2007 | |

Major UK charities fear that the UK-wide postal strikes could reduce fundraising revenue.

Response rates are set to suffer because of the strikes, with some smaller charities likely to experience the biggest problems with income over the two-week strike period.

“The postal strike has not only delayed the appeals we have sent out to donors, but it has postponed incoming funds from those who want to help us support disabled people,” said Karen Barnes, head of direct marketing and legacies at Scope.

However, Barnes stressed that the charity had taken steps to ensure that the services it provides were not affected.

Geraldine Cetin, marketing manager for acquisitions at the Royal National Lifeboat Institution said that in combination with the recent flooding across large areas of the UK, the strikes could prove most detrimental to smaller charities, which lack the contingency funds of larger organizations.

As well as delays to campaigns, charities are concerned about the strike’s potential impact on response rates and subsequent income.

“If donors receive two-week’ worth of mail in a couple of days, response rates will decrease,” said Andrew Jones, head of direct marketing at the Royal British Legion. “The strike could mean that we have significantly reduced direct mail income for two weeks.”

Jones also highlighted problems with response management at mailing and fulfillment houses and disruption to planned campaigns as further issues.

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Royal Mail lines up next sell-off

Posted by | Jul 29, 2007 | |

Royal Mail is to sell off a second multi-million pound property port-folio of post offices and sorting depots just months after concluding its first GBP 70m deal.

The state-owned postal service has appointed property agents Atisreal to undertake the sell off, which property professionals predict will contain a significant number of retail post offices, as well as industrial and office buildings.

Although many of the transactions are likely to be sale-and-leasebacks, the move to cut liabilities and generate cash from its property portfolio is likely to anger campaigners trying save the post office network in the face of planned closures.

The sale in March of 300 properties was a mixture of freeholds and leaseholds, some occupied some vacant, and was bought by Land Securities Trillium, the outsourcing arm of the largest property company in the UK.

Although the make up and size of the portfolio now being put together has not been defined the sale price could top GBP 20m.

With a countrywide property portfolio estimated to exceed GBP 2 bn in value, Royal Mail is in a position to realize a lot of value from its assets, as it implements a rationalization programme aimed at cutting losses and helping it compete against the private sector.

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European Commission plots action over postal VAT

Posted by | Jul 27, 2007 | |

The European Commission is threatening to take the Government to the European Court of Justice unless it amends the law which allows Royal Mail to be exempt from paying VAT, in a move which could force a huge hike in postal rates.

The postal operator’s rivals have been pushing for a review for months, saying the exemption gives Royal Mail a significant price advantage.

The EC has formally requested that the UK, as well as Germany and Sweden, amends its legislation on the exemption.

The threat is part of EC plans to ensure fair competition between former monopolies and market entrants. The EC has described Royal Mail’s VAT exemption as ‘the single most important obstacle to achieving effective competition in this sector’.

The Commission also claims to have received a number of complaints that the different tax liabilities distort competition and that Royal Mail should be subject to the same tax regulations as its competitors.

Laszlo Kovacs, European Commissioner for Taxation and Customs, says: “The EC, as guardian of the EC Treaties, is obliged to ensure that EU rules are applied in a harmonised manner across the Community.”

A Royal Mail spokesman says: “Royal Mail remains opposed to the imposition of VAT on our postal charges. While the issue of VAT is a matter for the UK Government, we have said that an increase in stamp prices as a result of the imposition of VAT is the last thing we want for any of our customers, particularly charities and small business.”

Royal Mail also questioned the actions of the European Commission in pursuing its VAT exemption, when large parts of the EU will not have fully liberalised postal markets until 2009 at the earliest, under the latest EU timetable. The UK’s postal market was opened up to full competition in January 2006.

Postcomm recently urged the EC to change its VAT framework so that all postal operators can pay a reduced uniformed VAT rate to make the market ‘a level playing field’ for all operators. The independent postal service regulator welcomed UK Mail’s recent move to make it exempt from paying VAT on its downstream access.

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Industry backs rethink of zonal pricing

Posted by | Jul 27, 2007 | |

Celebrations over the rejection of Royal Mail’s zonal pricing plan were shortlived, with most people agreeing the scheme will be implemented eventually. But at least now it will not be rushed in

When Royal Mail first mooted the introduction of zonal pricing (PM July 14 2006) it was intended as a pre-emptive strike to prevent competitors from cherry-picking major business clients, by bringing in a pricing structure that offered major discounts for city deliveries.

Designed to charge more for delivering to outlying areas, it was part of the postal operator’s strategy to introduce cost-reflective pricing, affecting all mail sent through Mailsort 3 – the most popular service for direct mail – and magazine-delivery scheme Presstream.

But the benefits evaporated almost overnight when Royal Mail revealed that deliveries inside the M25 were also to incur a surcharge.

One of the main voices of discontent was the Periodical Publishers Association (PPA), which condemned Royal Mail’s zonal pricing plans, as “benefiting no one but Royal Mail and being hugely damaging to the magazine industry”.

Only last week the PPA was claiming that pressure from its members had led to Royal Mail revising its application.

Seven days on and the scheme is doomed, following Postcomm’s decision to force Royal Mail back to the drawing board once more.

A PPA spokeswoman comments: “It is in everyone’s interest that we have a healthy Royal Mail but the impact of these proposals would have led to a reduction in all mailing volumes, including those of magazines. We don’t dispute price-reflectivity but it is not easy to implement without competition in the market.”

Meanwhile WWAV Rapp Collins Group chief executive Marco Scognamiglio says: “While we believe that Royal Mail should have greater flexibility when dealing with business customers – to compete effectively with rival operat- ors and with other media channels – this zonal pricing proposal was clearly not the way forward.

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Royal Mail to sponsor Green Awards direct category

Posted by | Jul 26, 2007 | |

Royal Mail is to sponsor the direct mail category of this year’s Green Awards, as part of its endorsement of environmentally friendly methods of marketing.

The Green Awards, which take place on October 26 in London, were held for the first time last year to recognize businesses that make an outstanding contribution to sustainable development, recycling, resource efficiency and waste awareness in the marketing industry.
Royal Mail said its endorsement of the Green Awards’ Best Green Direct Mail category was part of its commitment to environmentally friendly practices, which include its carbon neutral door to door scheme, corporate social responsibility, and responsible mail programmes.
Other award categories include Best Green Press; Best Green Integrated Campaign; Best Green Packaging Design, sponsored by Asda; Best Green PR Campaign; and Best Green Outdoor, which is being sponsored by Clear Channel.
Matthew Neilson, head of media solutions at Royal Mail, said: “Royal Mail firmly believes that a high quality direct mail campaign can still exist, and the key to this is careful targeting and sensitive use of materials, to avoid pollution and excess waste.”

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