Tag: Royal Mail

The postal regulator has threatened disciplinary action against Royal Mail, including the forced break-up of the group, if it uses anti-competitive practices to resist liberalisation in the market. Speaking at the UK Mail Show in London, Nigel Stapleton, chairman of Postcomm, said the aim of liberalisation was to deliver better value and more innovative services to customers. He warned that in the past other monopoly providers in the process of deregulation “have indulged in anti-competitive practices, often by accident rather than by design, such as predatory pricing or discrimination between customers”. Mr Stapleton said that so far there had been only one case of alleged anti-competitive behaviour at Royal Mail, when it was accused last year of offering preferential rates to certain business customers, although no action was taken. But the regulator would watch out for any abuses at Royal Mail, and act quickly to punish them.

Postcomm will focus on preventing anti-competitive practices by the monopoly supplier, and improving customer protection in the next stage of its drive towards a fully competitive market in postal services, Nigel Stapleton, chairman of Postcomm, told a conference today. Speaking at the UK Mail Show in London, he said the 80 million items a day handled by Royal Mail together with its daily national coverage allow substantial economies of scale and act as barriers to competition. New entrants also need to overcome customer inertia, a lack of knowledge of the new competing products and Royal Mail’s VAT advantage – it is exempt from VAT whereas competitors must add VAT to their prices. Royal Mail recently returned to profit but at the expense of customer service, Mr Stapleton said. “Royal Mail has missed all its service targets for last year and the first quarter of this year: that is effectively a covert price increase and suggests competition should be speeded up so customers have more choice.”

The failure of the Royal Mail to meet its delivery targets suggests that competition should be speeded up to give customers more choice, the head of the industry’s regulator said today. Nigel Stapleton, chairman of Postcomm, said the Royal Mail’s recent return to profit had been at the expense of customer service. He told London’s UK Mail Show: “Royal Mail has missed all its service targets for last year and the first quarter of this year. That is effectively a covert price increase and suggests competition should be speeded up so customers have more choice.” Mr Stapleton added that the 80 million items of post a day handled by the Royal Mail and its “substantial” economies of scale acted as barriers to competition.