TNT: Investment is unfair on competitors

Thursday, 18, May 2006 12:00

Postal firm TNT, a rival of Royal Mail, has said it is "unfair" the government is investing £1.75 billion in the Royal Mail.

A spokeswoman she was alarmed at the decision, which would damage new competition following the full liberalisation of the postal market on January 1st this year.

It was unacceptable that competition is "distorted" by VAT and barriers such as this, she said, adding that this amounted to £77 per household, more than three times what the average family spent on postage in a year, and equivalent to one pence on every letter Royal Mail would carry for the next ten years.

She said TNT's presence in the market had "invigorated" the sector, and called it "unfair" that Royal Mail was offered money when it had more than 97 per cent of the UK licensed postal market.

"We will need to examine the detail and will ask the European Commission to get involved, if needs be,“ she added.