Post watchdog concerned about would-be Royal Mail buyers

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The head of the postal regulator has added to concern over a Dutch postal group buying a stake in Royal Mail by raising competition issues, The Times has learnt.

Tim Brown, chief executive of Postcomm, said in a letter to John Grogan, Labour MP for Selby, that while would-be buyers that had no interest in the British market would raise no competition issues, that may not be the case if TNT, the Dutch company, were the preferred bidder.

Mr Grogan had asked for Postcomm’s view on competition issues, amid fierce political and union opposition to a sale.

TNT, one of Royal Mail’s biggest rivals, was the first to show an interest in buying a stake as the controversial move to sell part of the state-owned group was being prepared in a government-commissioned report last year.

Now TNT has held advanced talks with the Government and is seen as the clear front-runner as Lord Mandelson, the Business Secretary, attempts to take legislation to sell a stake through Parliament. The emergence of competition concerns comes as Deutsche Post, which had been linked to a bid, is thought to be distancing itself from a move.

In his letter, Mr Brown writes: “Were TNT to be chosen as preferred bidder then this could have the potential to raise competition concerns, as TNT are one of the largest competitors to Royal Mail for pre-sorted bulk mail.”The postal regulator’s concerns follow similar fears from MPs on the Business and Enterprise Select Committee, which recently produced a damning report on the planned partial sale.

Mr Grogan, who has campaigned for years to keep Royal Mail in full public ownership, said: “Ministers cannot have it both ways. For years they have been extolling the virtues of competition in the bulk mail market.

“They should not be surprised now if the regulator objects to Royal Mail and TNT merging and re-creating a virtual monopoly. TNT will now have to weigh up the very considerable regulatory risks if they do a deal with Peter Mandelson. They may very well decide not to bother.”

More than 140 Labour MPs have signed a Commons motion opposing the partial sale.