RM faces threat of watchdog censure in battle over prices.

NEWS · Post by **NEWS** » 08 Jul 2007, 23:50

Royal Mail is facing action from the postal regulator after a complaint from DX, one of its rivals, that it had breached pricing regulations.

Postcomm is due to make a formal ruling in the next few weeks, but the regulator has already outlined concerns over a new service that operates in DXâ€™s area.

As the dominant incumbent, Royal Mail is not allowed to lower its prices selectively because that impedes emerging competition. Instead, if it lowers prices it has to offer those prices to everyone. DX argued that it had circumvented this by creating a new service and arguing that this served a niche market, rather than a broad one.

A spokesman for DX said: â€œDX remains very concerned about anti-competitive behaviour by Royal Mail and urges Postcomm to act decisively to meet their statutory duty to promote competition.â€

Post by **britwrit** » 09 Jul 2007, 00:23

Wow. It's sort of a case of "Hey, you big bully, stop picking on that smaller bully."

Post by **rhino49** » 09 Jul 2007, 04:18

these competitors have had long enough to sort out their own delivery systems - they should now pay whatever they can negotiate with us - not have cheap access forever - it's like having grown up, working kids that pay you a tenner a week and expect everything done for them.

F0zziebear · Post by **F0zziebear** » 09 Jul 2007, 10:00

This has been as issue for a while. Royal Mail is not supposed to cross subsidise it's products. If they did this then they would be creating artifical price ceilings. DX operates in a niche area of the market, and is owned by a private equity company called Candover.

Knowing RM as I do the strategy and pricing areas are run by some reasonably clever people (may not seem like it where you are) and this criticism doesn't surprise me. RM's revenue is complex enough so that money can be put against different products and it is almost impossible for someone to un-pick.

I would be surprised if other incumbent's weren't doing this in other countries and it's down to the regulator to maange it effectively.

The smaller bully in this case is a company that was bought, needs to be shaped up and sold for a profit by their owners to another larger bully

Does that shed any light?

F0zz

Post by **dvbuk55** » 09 Jul 2007, 16:46

rhino49 wrote:these competitors have had long enough to sort out their own delivery systems - they should now pay whatever they can negotiate with us - not have cheap access forever - it's like having grown up, working kids that pay you a tenner a week and expect everything done for them.

Bloody hell rhino49 you have just described my domestic circumstsnces - but without the tenner - to a tee!

johnnyp · Post by **johnnyp** » 09 Jul 2007, 17:12

dvbuk55 wrote:
rhino49 wrote:these competitors have had long enough to sort out their own delivery systems - they should now pay whatever they can negotiate with us - not have cheap access forever - it's like having grown up, working kids that pay you a tenner a week and expect everything done for them.

Bloody hell rhino49 you have just described my domestic circumstsnces - but without the tenner - to a tee!

kinmad4it · Post by **kinmad4it** » 09 Jul 2007, 19:37

So let me get this right....
This DX company are complaining that Royal Fail are undercutting them and that that is unfair?
But isn't that what our competitors do to us?
Seems a tad hypocritical.

DirtyHarry · Post by **DirtyHarry** » 09 Jul 2007, 19:40

That's what amounts to doing business , in rip-off Britain.

ROCKY · Post by **ROCKY** » 09 Jul 2007, 19:59

you have to remember to them we are the big bad ogre and that means everything has to be in their favour all the time,mind you it does not help that they are crap

ROYALMAILCHAT

RM faces threat of watchdog censure in battle over prices.

RM faces threat of watchdog censure in battle over prices.

re: RM is not supposed to cross subisidse