01 July 1998

MOUNTING CONCERN at the increased commercial freedom enjoyed by the Post Office, allied to the government’s failure to nominate an industry regulator, has prompted a powerful quartet of direct marketing service companies to plan the appointment of their own independent ombudsman to monitor the Royal Mail and the use of its new-found liberty.

Many in the direct marketing industry are worried that the Royal Mail may use its monopoly to compete unfairly: for example setting-up a commercial mailing operation. This could harness the RM’s massive mailing, sorting and computer capacity at low marginal cost to offer clients bulk mailing discounts greater than those available from existing mailing houses. .

The foursome between them account for a substantial proportion of the UK’s direct marketing production capacity. They are WWAV Rapp Collins, Europe’s largest direct marketing services group with its own Crawley-based mailing subsidiary, The Lettershop Group, Mailcom and SR Communications. Recruitment of an unofficial regulator is already under way and it is hoped to announce an appointment in September. The appointee will possess in-depth knowledge of the mailing and postal industry, and be able to conduct an informed interrogation of the Royal Mail and DTI about their plans [and make sense of the answers!]. The watchdog will also offer to act as a sounding board if required. .

The DTI’s stance is that the appointment of an official regulator is integral to the overall review currently being conducted into the future of the Post Office, the conclusions of which will be published in the autumn. Speaking for the quartet, John Watson, chair of WWAV, said they had no confidence in the ability of the DTI to act as interim regulator, although he stresses: 'We have not been asking for special treatment, just that the Post Office is regulated in the same way as companies like BT. A clear regulatory structure is in the interests, not just of the direct marketing industry, but the Post Office which needs a clear idea of what it can and cannot do.'