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Royal Mail Direct Marketing Association

Privitisation of Royal Mail will "undoubtedly benefit" business customers says DMA chief of operations

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By Gillian West, Social media manager

July 10, 2013 | 2 min read

Mike Lordan has said the Direct Marketing Association is “looking forward to seeing the detailed proposals of the privatisation of the Royal Mail” following the news that the government will sell Royal Mail through a flotation on the London Stock Exchange.

Confirmed by business secretary Vince Cable this afternoon, MPs were informed that employees would be given 10 per cent of shares for free, and the public would be able to buy shares with the sale likely to value the business at £2bn-£3bn.

In a statement the chief of operations for the DMA said: “The success of the UK’s multi-billion pound direct mail marketing sector depends on a strong and healthy postal system. Direct mail now represents a significant portion of Royal Mail’s revenues, and this is likely to increase.”

Lordan added that the sale would be of benefit to business customers of Royal Mail who would “undoubtedly benefit from increased competition, as well as further investment in the marketing channel.”

Speaking to the House of Commons, Cable remarked: “Now the time has come for government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future. This government will give Royal Mail the real commercial freedom it's needed for a long time.”

Despite companies such as TNT and DHL being suggested as possible buyers selling shares on the stock exchange has been chosen over selling to a private operator. As letters are proving less profitable Royal Mail has shifted its focus recently more to parcels, with parcel delivery helping Royal Mail to more than double its profits last year.

Lordan furthered: “As Royal Mail passes into private ownership, the DMA will continue to maintain a strong working relationship with the organisation to ensure the interests of marketers are represented.”

Though the DMA is backing the move, member of the Communications Workers Union (CWU), which represents around two-thirds of Royal Mail workers, have opposed the privatisation of the business, threatening strike action.

Billy Hayes, CWU general secretary, has openly said: "Nobody outside of government and their potential investors wants their postal service sold. The public consistently oppose the sale and recently 96 per cent of workers voted against."

Royal Mail Direct Marketing Association

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