Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Australia Post leverages its superbrand for an unfair advantage

Mark Fletcher
November 29th, 2005 · No Comments

Talk to anyone in business of brand management and they will agree that Australia Post is a superbrand. Indeed, do a search on the Net and Australia Post is lauded as a brand success story. Read Australia Post’s 2004/05 Annual Report and you can see why their brand is so successful. Their postal service is loved with 94.9% of domestic letters delivered on time.

The majority of the goodwill invested in their brand is as a result of the postal service. More recently, Australia Post has successfully leveraged the postal service brand into bill payment, Post branded stationery products, general retail and other products and services. Without the postal service branding Australia Post could not have successfully entered these business areas.

The postal brand provides Australia Post with an unfair advantage and it is the leveraging of the postal service brand into general retail which the Australian Government Competitive Neutrality Complaints Office (AGCNCO) ought to be asked to investigate.

Thanks to its postal service monopoly Australia Post can land a customer in their retail space for a fraction of the cost to other businesses such as newsagencies. Their lower per customer cost is not as a result of commercial negotiation skills, it’s because Australia Post is a superbrand has successfully leveraged that brand way beyond what is outlined in the Act under which it operates. This is where government ownership of Australia Post is delivering an unfair advantage.

The 2004/05 Annual Report is full of data demonstrating the success of the postal service. While it considers retail a core business, the Annual Report discusses it in terms of strengthening their “position as a destination for agency services, philatelic products and packaging”. Talk about smoke and mirrors. There is no reference in the Annual Report to the non philatelic, packaging and agency services products they sell such as books, crosswords, greeting cards, picnic products, electrical cords, printers, cameras, double adapters, blank CDs, blank DVDs, paperclips … I could fill a page with a catalogue of the home office stationery and allied products these PostShops sell. They do this to the detriment of struggling small businesses.

The government as legislator and shareholder is conflicted yet no one in the government cares. The ministers responsible (Senators Coonan and Minchin) are not watching the corporation they are responsible for and the damage it is wreaking on small business, they seem to be ignorant of how far Australia Post has strayed from what is provided for in the Act.

The Government has no business owning a retail network. The Australia Post retail network should be sold to local small businesses so that they can benefit from the low cost traffic Australia Post attracts. Unfortunately, however, the government seems to be headed in the other direction by allowing Australia Post to morph way beyond its brief and into territories hitherto the domain of small businesses.

One day someone will realise the businesses closed and the jobs lost as a result of the actions of Australia Post.

This is unfair competition.

References: Superbrands; Lovemarks ; BRW


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