In what some see as the thin end of the competition wedge, the domestic letterpost monopoly enjoyed by Britain's state-owned Royal Mail Group is under threat from marauding milkmen.
Speaking on BBC Radio's On the Ropes programme, the Royal Mail’s part-time chairman and former supermarket boss Allan Leighton revealed that postal regulator Postcom has granted a bulk mail delivery licence to Express Dairies, the nation’s largest direct-to-homes distributor of milk and dairy products.
The Royal Mail, currently the nation’s largest employer with a (fast diminishing) payroll of 170,000 and a daily throughput of eighty million items, isn’t losing any sleep over loss of market share – yet. Express Dairies’ licence confines it to a meagre delivery total of 4.6 million items over the next twelve months.
But the firm could become formidable competition if its remit is extended. Via 3,500 milk rounds (distribution territories), mostly in urban areas, it already delivers 12.8 million catalogues and other pieces of promotional material annually in addition to its staple fare.
In his BBC interview, Leighton warned that the Royal Mail is unlikely to emerge from the red for the next three years during which time it is likely to continue losing £1.5 million ($2.35m; €2.37m) a day.
Nor does he believe the Royal Mail/Post Office will be privatised in the near future: “I’m prepared to say in my time-scale we will not see the Post Office privatised,” Leighton predicted. A prophesy that fits neatly with the thesis that his secret brief from the Blair administration is to downsize the ailing giant for eventual sale.
Data sourced from: BBC Online Business News (UK); additional content by WARC staff
