DIRECT NEWS: Post Office rejig sparks fears at DMA

The direct marketing industry has voiced its concern over a decision by the Department of Trade and Industry to give the Post Office greater commercial freedom without the balance of an industry regulator.

The direct marketing industry has voiced its concern over a

decision by the Department of Trade and Industry to give the Post Office

greater commercial freedom without the balance of an industry

regulator.



The proposals set down last week by Margaret Beckett, President of the

Board of Trade, would allow the Post Office to enter into joint

commercial ventures - some of which, the industry fears, would compete

with direct marketing services companies, such as data processing

bureaux and mailing houses.



The Direct Marketing Association fears that, in the absence of an

official watchdog, the Post Office may abuse its monopoly and undercut

existing suppliers.



David Robottom, the development director of the DMA, said: ’Direct mail

is the major profit centre for the Royal Mail and, as such, investment

in the infrastructure is essential. However, the DMA is concerned about

the Royal Mail going into competition with the supply side of the

industry.’ He added that the DMA would be seeking clarification on this

point from the DTI.



WWAV Rapp Collins, the UK’s largest below-the-line agency, gave evidence

to the Commons select committee on trade and industry, warning of the

possible dangers of the scenario.



John Watson, the chairman of the WWAV Rapp Collins Group, told Campaign:

’We now have the prospect of the Post Office being allowed to compete

with existing direct marketing services providers on an uneven playing

field. We have no problem with competition - but everyone has to be

competing on equal terms.’



A spokesperson for the Post Office said: ’We are still assessing future

policy. There is no suggestion at the moment that we are doing anything

that will pose a threat to the industry.’



A Post Office insider added: ’We’re in a position where we can expand as

a media owner and that’s for the good of the industry.’



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