Postal changes have not helped small firms

8 January 2007
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08 January 2007 | Paul Snell

Many small companies are unaware of the benefits of increased competition in postal services, according to a study by the Federation of Small Businesses (FSB).

Small Businesses and the UK Postal Market also found that 43 per cent of organisations have been hit by increased costs following the introduction last year of Royal Mail's charging system, Pricing in Proportion. Only nine per cent said they had seen a decrease in costs, but Royal Mail had estimated that most postal services would not cost more under the new scheme.

The survey also revealed that 35 per cent of the 3,356 members of the FSB questioned were not aware that the postal market had been opened to competition. Nearly 95 per cent still use Royal Mail exclusively and most believe that they are too small to benefit from increased competition or to be viable business customers to suppliers. Yet proportionally they spend more on mail than large businesses.

The FSB said Royal Mail should consider a financial rebate for small businesses worst affected by the changes. They also urged mail regulator Postcomm to give more support and information to small businesses regarding market liberalisation.


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