Direct marketers angry at loss of Postwatch voice

Direct marketers are furious at proposals in the Queen’s Speech which will lead to the demise of Postwatch, the consumer watchdog that monitors the postal industry.

The consumer champion’s success in defending postal users’ interests against Royal Mail’s market dominance has made it popular with direct mailers. One of the direct marketing industry’s leading voices, Edward Mutton, director-general of the Institute of Sales Promotion, has accused the Government of plotting to gag the watchdog.

He points out that promotional marketers are “very big spenders on mail”.

“At the moment we – and other business users – have a voice through Postwatch’s trade associations forum. We have been consulted on issues such as pricing in proportion,” he adds. But we are afraid that the new body will focus on individual consumers and that our corporate voice will be drowned out. We also suspect this is a political move to silence Postwatch.”

Single voice for consumers
In October, consumer minister Ian McCartney announced plans to provide consumers with a single point of contact for a range of consumer issues. Consumer Voice, he said, would pull together the National Consumer Council, Energywatch and Postwatch into a single body which would be a “powerful and effective advocate” for consumers. It will also save money, the DTI argues – around £10.5m a year.

However, the direct marketing industry believes that Postwatch has done an excellent job for businesses, the biggest mail users in the UK. Royal Mail’s top 100 customers produce approximately one-third of its £6bn annual revenue.

Some 82 million items are posted daily in the UK, or 22 billion a year: 58% from businesses to domestic customers; 28% is business-to-business; 5% from consumers to businesses; and only 9% is consumer to consumer. 

Compensation matters
One move that may have irked the Government was Postwatch’s 2005 request for a judicial review of a decision by regulator Postcomm not to force Royal Mail to repay £40m to bulk-mail customers in compensation for missing service targets during 2003 and 2004. Mr Justice Sullivan agreed with Postwatch that the money should be refunded, although Royal Mail is currently appealing against his decision.

Postwatch itself is rather more diplomatic about the compensation issue and its impending demise. It also says business users will be catered for by Consumer Voice. A spokesman says the new body will have the same terms of reference as Postwatch when it comes to looking after the interests of all postal users, consumers or businesses, adding “business are consumers too, in this sense.” Alex Walsh, head of postal affairs at the Direct Marketing Association (UK), says that the future of Postwatch will be on the agenda for this week’s meeting of Postwatch’s trade association forum. He accepts that the UK’s big business-mail users could form their own lobby group, but says any such body would be unlikely to have the same weight and visibility that Postwatch has: “It is extraordinarily useful to have a body that represents the industry and has authority.” Walsh adds: “We need an industry forum, and we must get together with Postwatch and Postcomm to discuss what can be done in the future.” It remains to be seen whether the Government will listen to the industry’s suggestion that, if the new body exclusively focuses on individual consumers, the interests of business users will suffer.