As was largely expected Postcomm have announced that the remaining bulk mail products – Mailsort 1400 First and Second class and Cleanmail – are to be removed from the universal service.
The decision was announced on 1st August and followed a 3 month consultation (which closed on 31st May 2011).
Postcomm’s Decision Document (Removing bulk products from the universal service and clarifying the status of other universal service products) stated that responses to the consultation document made it clear that:
- The universal postal service remains important to customers today, but their needs are changing
- The bulk mail market has seen a lot of change
- There was evidence from interested parties that indicates that bulk mail products no longer need to be in the universal service
In 2010 Postcomm carried out a review of the needs of bulk mail users.
This revealed that they largely prioritise the importance of low price bulk products, but appear less attached to the key features of the universal service, in particular uniform pricing.
Postcomm also carried out a recent market study which showed that the bulk mail market is increasingly competitive. Consequently bulk mail consumers have much greater choice than in 2005, when they took the decision to retain a bulk mail product in the universal service.
Although the decision to remove these remaining bulk mail products from the universal service was largely supported, there were some concerns raised about the possible impact of Value Added Tax (VAT).Removing bulk mail from the universal service may result, from 2012, in Royal Mail’s retail bulk mailing services becoming subject to VAT – given the regulatory framework set out on the Postal Services Act 2011.
