Rival post costs Royal Mail millions

Royal Mail chief executive Moya Greene has demanded a rethink on how much it can charge rivals to deliver their mail after it emerged the postal operator was losing millions of pounds a year providing the service.
The call came as Royal Mail revealed its operating profits over the past six months have slumped by 72 per cent, from £184m to £52m. Its letters business lost £66m over the six months to September – compared with a profit of £48m over the same period last year.
The fall has been blamed on the rise of email and tough economic conditions.
But with over 22 million of the 68 million letters it delivers coming from rival firms, Royal Mail claims it is losing 2.5p on each one – equating to a loss of nearly £6m a year.
This figure is likely to rise further as private operators gain more postal business; there was a 13 per cent rise in so-called “access” mail in the first six months alone.
Greene said: “We need to end what is, in effect, a very substantial built-in subsidy from Royal Mail to its rivals.”
She added that a major effort was underway to tackle the group’s heavy underlying negative cashflow, including a special request to the regulator, Postcomm, for fair bulk business mail prices.
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