Postal reforms will cut DM bills

Direct mail will become cheaper as a result of the government’s review of the Post Office.

Direct mail will become cheaper as a result of the government’s

review of the Post Office.



For every penny cut from costs, direct mail volumes rise by at least 70

million items, with expenditure up by pounds 30m. Last year 3.42 billion

items of direct mail were carried, with expenditure of pounds 1.54

billion.



Peter Mandelson, secretary of state for trade and industry, said in a

statement this week: ’The Post Office will be given the freedom to price

flexibly for volume users.’ This means that the Mailsort rate, the

discount postage charge for direct mailers, may fall further.



The Post Office will also be given the freedom to compete beyond its

traditional areas, probably list broking, data and mailing print and

production, leading to a further reduction in costs for users.



It is already competing in the telemarketing arena using SSL, the Post

Office subsidiary that collects the TV Licence fee.



The new regime will be overseen by a regulator, OfPost. Until then,

pricing and competition will be controlled by the DTI. A group of direct

mail companies, led by WWAV Rapp Collins, maintains that the DTI is

biased and is setting up its own regulator.



WWAV’s chairman, John Watson, said: ’There is still a void and so we

intend to go ahead with our plans to appoint a watchdog. A shortlist of

candidates has been drawn up and a fighting fund established.’



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