DMA calls for caution over postal review

The DMA has warned the government not to place an "unrealistic burden" on businesses to fund a universal postal service when it publishes its review next year.

Secretary of state for business John Hutton announced the review on 17 December, outlining the government's commitment to maintain the universal service while investigating the impact of opening the postal market to competition two years ago.

DMA head of postal affairs Alex Walsh told "I think that it is appropriate to review exactly what the 'universal service' is in the light of increasing use of electronic media by consumers, and not place an unrealistic burden on business users to support it."

Royal Mail has introduced a range of proposals, such as pricing in proportion and zonal pricing, to help it compete more effectively in the new open market.

It has argued that its competitors have been able to cherry-pick the higher margin business sectors, while it has been hobbled with maintaining an affordable universal service for consumers and providing the final-mile delivery.

However, many of these new ideas impact more heavily on users of business mail, such as the direct marketing industry.

Richard Hooper, Deirdre Hutton and Ian Smith, who will carry out the review, have called for evidence from the parties involved. These include Royal Mail, Postcomm, Postwatch, the CWU, Unite, the National Federation of SubPostmasters and the Federation of Small Businesses.

Walsh said he wasn't sure how the DMA would be involved in the review, although it is a member of the Postwatch trade association forum.

However, he stressed that it is important that business users get involved, noting that the consultation would not include any direct representatives of large mail users.

"The government's commitment to a review of the effects of liberalisation was a factor in the CWU ending its recent industrial action, and large users of mail must make sure that their views are heard. What we need are recommendations based on the needs and views of large mail users and not based on political expediency," he said.


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