Dutch monopoly delivers mixed message

IF Michael Heseltine gets his way, Britain's postal workers could end up tilting at windmills, writes William Kay.

The Dutch state post and telecommunications monopoly, Koninklijke PTT Nederland (KPN), said last week that it was floating its shares on the Amsterdam and London stock markets.

But even under state control, KPN has been operating as a commercial company for the past five years, setting its own strategy and raising capital for itself on the financial markets. What that amounts to, on the postal side of KPN, is less a post office than a freight transporting and warehousing business, moving aggressively into the courier and logistics markets and signing up for joint ventures when that fits its aims. And, as millions of British householders have come to realise, KPN is not above bending the rules of the Universal Postal Union system if it helps to hustle a bit more business. Those rules prevent a foreign postal service from receiving British mail and delivering it back into the UK.

KPN resented Mr Heseltine's jibe that the Dutch monopoly 'could come here and do deals to deliver British parcels or letters, then take them off to Holland, and post them in Holland back to this country, undermining our Post Office'. But there is nothing to stop a UK company with a Dutch office - or, for that matter, a foreign company with operations in Britain and Holland - choosing to send junk mail from its Dutch outpost to UK customers.

Because Dutch postal charges are lower, this is a favoured and entirely legitimate tactic of US companies such as Time Life, Fortune and American Express, as well as a shoal of dubious share tipsters.

'If part of the company is in Holland, they are allowed to do that,' said Gertjan Versteeg, KPN's spokesman.

But he agreed that the postal industry was becoming more international and that KPN was competing closely with local courier services. It also sell insurance and travel services, and rents cars.

'It is very important for us to go into these other activities,' Mr Versteeg said, 'because the amounts of post will not increase.'

As Mr Heseltine has pledged in Britain, KPN is obliged by law to provide Holland's mandatory postal services, especially the delivery of letters, parcels, printed papers and goods weighing up to 10kg at uniform rates throughout the Netherlands. In 1993, this accounted for about 86 per cent of the turnover of PTT Post, KPN's postal division.

But, apart from the courier services, KPN's potentially most exciting diversification has been into what it calls logistical services. This covers storage, ordering, packing transport and distribution services for business customers.

Once KPN has shown its paces locally to a multinational group such as Unilever or Royal Dutch/Shell, there is no reason why it should not extend the services to those companies' foreign operations.

To add to its cross-border know-how, KPN has entered into GD Express, a joint venture with TNT - and, significantly, the postal services of France, Germany, Sweden and Canada.