**** Press release Wednesday 15th May 2024
The UK’s Greeting Card Association (GCA) issued the following statement in reaction to the
announcement that EP Group had made a revised cash offer for IDS and the Royal Mail.
GCA chief executive officer Amanda Fergusson said:
“Today’s bid does nothing to change the concerns we’ve been expressing for some time. Our 500-plus members, largely small businesses, and the consumers they serve rely on a Royal Mail that’s national, reliable and affordable. That cannot be compromised.
“We will need to see these principles enshrined in any undertakings between the government, IDS
and EP Group before any recommendation of this offer. It’s not just enough for EP Group to give contractual undertakings about first class, six days-a-week delivery – this must include an undertaking to deliver legal service standards in place at any time.”
For Further Information please email Nick Agarwal at gca@arena-pr.com
Editors’ Notes
Last month the GCA submitted its response to Ofcom’s proposals) to weaken the ‘Universal Service
Obligation’ (USO) cutting back letter deliveries to five or even three days per week and giving Royal
Mail more freedom to raise prices.
- It’s submission can be found at GCA response to Ofcom
- In the submission, the GCA makes clear:
o More price rises and service reductions will accelerate a decline in the British postal service,
leading to increasingly frequent requests for bailouts.
o There is no underpinned service recovery plans or evidence of meaningful progress to restore
the Royal Mail service to legally required levels.
o There is no historical precedence of a declining industry recovering by radically increasing
prices whilst concurrently dramatically reducing service. The GCA therefore has no
confidence that Ofcom’s currently proposed solutions will do anything other than accelerate
existing postal decline.
o it’s simply unjust to ask the British public to accept weaker service or the cost of subsidies,
when far simpler solutions would fix things faster.
In the GCA’s response to the regulator it asked that:
- Ofcom demands an immediate service stabilisation and restoration of public confidence in postal service levels as a priority.
- Any future stamp price rises should be conditional on Royal Mail delivering its required USO service levels. This week’s additional 10p on 7bn letters with no volume loss will raise over £100m for Royal Mail (based on Ofcom data that suggests 17pc of that volume is currently USO-regulated)
- Royal Mail should not be given the freedom to set pricing for monopoly products without transparent econometric or price elasticity modelling and meaningful consultation with consumer advocates and trade associations ahead of future pricing changes.
- Saturday deliveries should stay. Saturday delivery is crucial to GCA members and consumers.
Customers regularly order cards in anticipation of posting to, seeing a loved one over the weekend, and Saturday provides a critical backstop given current quality of service performance. It is even more critical in the run up to big seasonal events such as Mother’s Day, Father’s Day and Easter which fall on a Sunday. - Royal Mail explains how currently applying a peak surcharge to business letters during each festive period is consistent with its claim that falling letter volumes cause network under-utilisation which is the reason letter prices must rise.
- Royal Mail takes far more initiative approach to stem letter volume declines and plan to return
sectors of their Letters business to growth. The GCA’s continues to engage around commercial
opportunities, such as lowering the price of stamps ahead of Christmas. - There’s greater transparency from Royal Mail – In a market that Ofcom advises is highly unlikely to attract new entrants, there are extremely limited reasons why data can be justified as commercially confidential, especially in circumstances where Royal Mail are claiming they require further regulatory relief, bailouts and/or state support to continue.
