Sub-postmasters ask OFT to rule Post Office contracts 'illegal'

The Post Office was taken to the Office of Fair Trading yesterday in an attempt to have the contracts it imposes upon thousands of sub-postmasters ruled anti-competitive and illegal.

The Post Office was taken to the Office of Fair Trading yesterday in an attempt to have the contracts it imposes upon thousands of sub-postmasters ruled anti-competitive and illegal.

The Association of Convenience Stores, which represents 10,000 sub-post offices - two-thirds of the network - claimed its members were losing millions of pounds because of the restrictions imposed on them.

Its complaint to the OFT calls for the Post Office, which is part of Royal Mail, to be forced to withdraw the contracts so that corner shops that provide postal services have greater freedom to offer different products and services. A spokesman for the association said that under the current contracts, sub-postmasters are required to give the Post Office 20 per cent of all revenues from National Lottery ticket sales. He said this was costing them £10m in lost income each year.

The contracts also impose restrictions on the type of cash machines sub-postmasters can put in their stores and require them to buy stamps from the Post Office, rather than direct from Royal Mail. David Mills, the chief executive of the Post Office, told MPs earlier this year that he would not stop sub-postmasters breaching the contracts. But the association claimed this did not apply to individual sub-postmasters, only large groups that operated sub-post offices in their stores.

Postcomm, the postal regulator, also said there are "inadequate rewards for partnership" between sub-postmasters and the Post Office.

David Rae, the chief executive of the association, said: "We are optimistic of a positive hearing from the OFT."