With data indicating that greeting cards are critical to how Royal Mail is perceived by end consumers (Source: Ofcom), and 42 per cent of customers saying sending cards is the only time they use Royal Mail, the impact of the proposed Royal Mail takeover is a continuing concern for the industry, with the Greeting Card Association (GCA) campaigning to prevent the Royal Mail’s second class deliveries being cut back to three days a week and runaway prices for first class mail.
Earlier this week, Royal Mail’s owner IDS (owned by Czech billionaire Daniel Křetínský) confirmed that it has agreed, in principle, to an EP Group £3.57bn takeover of Royal Mail, with the deal required to be approved by whichever government is in power following the General Election on 4 July.
The takeover includes certain provisos, including EP Group agreeing to uphold Royal Mail’s legally-binding universal service obligation to deliver post six days a week across the UK for the same price. However, this assurance is only for the next five years.
The GCA views the undertakings being offered as inadequate, with Amanda Fergusson, the GCA’s ceo, stating:
“Our members are rightly concerned that the undertakings being proposed by EP Group in relation to its takeover of Royal Mail are inadequate and short-lived.
A first-class six-day service without long-term commitments on affordability risks leaving small businesses and consumers picking up the cost of this proposal. Undertakings that expire after a single five-year parliamentary term will not inspire confidence from small businesses and consumers that the service is being protected for the long-term.”
She continued: “Five- year commitments to support an institution with over 500 years of history appears to fall short. The government and regulator must insist on lock-tight, long-term undertakings on affordability and reliability and the protection of our national service before approving this deal. Any future reform of our delivery service must be dependent on Royal Mail meeting the performance targets they’ve already signed up to.”
Top: The proposed Royal Mail takeover needs government approval.
