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Commercial bulk mail threatened by removal of price controls
Dec 19 2011, 12:16 PM
The structure of an affordable universal service offered by the Royal Mail could potentially be undermined by its new commercial freedom, the Direct Marketing Association (DMA) has warned.
UK firms could be 'driven away' if price controls are removed from commercial bulk mail services. Many businesses have already incurred a 15-20 per cent increase in the cost of transactional bulk mail, and the DMA has warned that extra increases could drive companies away.
Industry concerns were addressed in a recent summit of business mail users, postal service providers, senior marketers and industry trade associations that was hosted by DMA. The association represents 800 direct marketing industry organisations and has said that many companies had indicated they plan to withdraw from using mail if Royal Mail takes advantage of its new commercial freedom to impose another round of large price increases.
Mike Lordan, chief of operations for the DMA, said changes to the postal regulations were “clearly intended” to make Royal Mail more attractive for privatisation.
“However, we believe there’s a danger that the Government has gone too far in its plans to prepare Royal Mail for sale to the private sector,” he said.
“Granting a monopoly the ability to raise its prices without adequate safeguards is very dangerous and could drive more and more businesses away from mail, which is concerning as mail volumes are already declining year on year.”
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