Royal Mail to Retain its Letter Post Monopoly – Pro Tem

29 May 2002

Following political pressure and massive lobbying by Royal Mail unions and management, UK postal regulator Postcom has backed down from the imminent introduction of competition in the nation’s letter post delivery service.

The regulator will announce today (Wednesday) that the opening-up of the market will be delayed until early in 2003. The decision is a victory for Allan Leighton, the former supermarket boss and new chairman of Royal Mail parent Consignia. He has vigorously argued that the early introduction of competition would inflict irreparable harm on the lossmaking organization.

The news will be received with mixed feelings by Britain's direct mail industry, where early competition – especially in the bulk mail sector – would have been welcome. But the diminution of the Royal Mail’s national service by regional cherrypickers would have been just as unwelcome.

Meantime the wannabe postmen, among them UK groups such as Business Post, and leading overseas operators like Dutch post office TPG will now be mothballing their plans to move into the British domestic market.

Also delayed is Postcom’s timetable for lifting all market entry barriers. Timed for spring 2006, there will not now be full competition in the letters market before 2007.

Britain's parcels delivery sector has been for many years a highly competitive battlefield in which Consignia’s Parcelforce unit has accrued massive losses – the main source of its parent’s current financial woes.

Data sourced from: The Times (London); additional content by WARC staff