Subpostmasters across the country have been left reeling after the Office of Fair Trading, (OFT) rejected a complaint against commercial restrictions in their Post Office contracts.

The ruling rejects a claim put forward by the Association of Convenience Stores (ACS) on behalf of Postmasternetwork in November 2004, that the contract is “one-sided, restrictive and anti-competitive”. Under the current system subpostmasters have to accept below-market rate commissions on some services, including the National Lottery, and aren’t permitted to offer products in their private retail stores that compete with Post Office products.

The OFT believes the restrictions are needed to ensure the maintenance of the Post Office network. The ACS disputes this and says many members are now considering their investment and future with the Post Office. The association met the OFT immediately after the interim decision and Postmasternetwork is now seeking government involvement in an attempt to stop the contract coming into force at the end of the year. It is asking its 7,500 members to write to their local MP to gain support.

Postmasternetwork founder and a postmaster of 20 years, Gary Coyle, believes by failing to change the anti-competitive nature of the contract the OFT has let down thousands of independent subpostmasters. He commented: “A lot of our members are unhappy with the current contract as it stops us from being enterprising.

In order to survive, subpostmasters need greater commercial freedom to source products from suppliers whose commission rates are more realistic than those offered by the Post Office. “The government has to make up its mind. Either it allows competition or it commits to further subsidy of the rural network to the tune of £150m a year indefinitely.”

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