Australian Newsagency Blog

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

Is the new Australia Post ship direct to China shop a breach of competitive neutrality?

Mark Fletcher
May 28th, 2018 · 2 Comments

Australia Post has opened a shop in Chatswood NSW where shoppers can select items for direct to China shipment. The store is aimed at Chinese personal shoppers, providing them an easy ship service that other Australian retailers struggle to achieve thanks to Australia Post inefficiencies for online retailers.

This is where I wonder if Australia Post is breaching competitive neutrality obligations it has as a government owned business. It appears to be giving its own business benefits that it does not give other retailers chasing online sales.

From Treasury:

Competitive neutrality requires that government business activities should not enjoy any net competitive advantages simply by virtue of public sector ownership. This allows market competition to drive the efficient production of goods and services by the lowest cost business.

This latest Australia Post, like so many in their corporate stores, leverages their government ownership and protection for competitive advantage.

The other issue here is the direct to China route opened for selling baby formula, product that can be challenging for Australian families to buy from Australian supermarkets. This is another aspect of this new Australia Post business that warrants discussion.

I am grateful to a regular visitor to this blog who pointed me to the story. Their concern related to the milk issue and the evolution of Australia Post – that baby formula is in short supply in particular.

Australia Post is straying further from its charter, leveraging its government ownership and protection to compete with commercial businesses.

The federal government listens to the Murdoch family when they complain about government owned ABC  commercial enterprises harming their commercial interests, why do they not listed when small business newsagents and other retailers complain about how the government owned Australia Post leverages its protection and government ownership to hurt them? Because small business only matters at election time.

20 likes

Category: Australia Post · Competition · Social responsibility

2 responses so far ↓

  • 1 er // May 28, 2018 at 8:34 AM

    get even with Austpost. using 4PX to direct shipment to China and lower cost

    0 likes

  • 2 Colin // May 28, 2018 at 9:37 AM

    The real issue with post office is cross subsidies. The retail and postal delivery arms should each be required to make a financial return. I doubt this shop would be cost effective if it had to pay the post office for the true cost of delivery.

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