Retford parcel firm fined £40,000 over illegal relationship with Royal Mail Group

A parcel company based in Retford has been hit with a £40,000 fine after it admitted having an illegal anti-competitive agreement with Royal Mail Group.

The SaleGroup, of Rectory Road, which trades as Despatch Bay, and Royal Mail’s ParcelForce division had a deal to share customers from August 2013 and May 2018.

Despatch Bay arranges deliveries for small and medium-sized businesses by sourcing parcel operators rather than doing deliveries itself.

Under the deal, both companies asked each other to withdraw quotes provided to certain customers.

Some of quotes were cheaper than customers were currently playing, which meant these customers were prevented from paying lower prices for the same parcel delivery services.

The SaleGroup also shared its customer list with ParcelForce, so each company could avoid offering services to the other’s customers.

The illegal set-up came to light in May 2018 when Royal Mail reported that ParcelForce had the agreement with Despatch Bay that neither would offer parcel delivery services to each other’s business customers.

Postal services regulator Ofcom has investigated and provisionally found the agreement broke competition law because it aimed to restrict competition by sharing customers.

Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, said: “Anti-competitive agreements like the one between Royal Mail and the SaleGroup are designed to restrict competition, and they often lead to customers paying higher prices as a result.

“This kind of behaviour is a serious breach of competition law and unacceptable.”

Under the Competition and Markets Authority’s leniency policy, the first company involved in certain types of anti-competitive agreement to come forward about it may receive immunity from fines, as long as the conduct is not already being investigated.

This means that Royal Mail will not be fined provided it continues to cooperate with the investigation.

Ofcom said the SaleGroup has accepted a fine of £40,000, which its describes as a significant fine given the small size of the company.

A Parcelforce Worldwide spokesperson said: “Parcelforce Worldwide welcomes competition and takes compliance very seriously.

“We have been fully cooperating with Ofcom throughout its investigation.”

We have invited The SaleGroup to comment.