Wait and see stance over reluctant post franchises

By KEVIN TAYLOR

NZ Post is staying silent on the fate of its franchises that refuse to have a Kiwibank branch.

Post chief executive Elmar Toime was questioned by Act MP Rodney Hide at the finance and expenditure select committee yesterday on a revolt by some post franchises over signing up to the bank.

Repeatedly asked in a curt exchange what would happen to a franchise refusing a branch - as some are considering doing - Mr Toime eventually said: "It's an impossible question to answer."

He said he could not comment about the shape of the network in a few years.

Kiwibank spokesman Bruce Thompson said this week that it would have to "consider its options" if a franchise refused to take a bank branch in an area where there was clear demand for one.

The fledgling bank, a NZ Post subsidiary, is facing a revolt by unhappy post franchises who say the 53c per bank transaction they are being offered is not enough and would be uneconomical.

Of NZ Post's 300 outlets, about 170 are franchises.

Seven Kiwibank branches are open so far, all in Hawkes Bay and Palmerston North, but only at NZ Post corporate outlets.

The bank had been aiming for 300 branches by the end of May but bank head Sam Knowles told the committee that it would now be "somewhere above 200".

It is not known how many franchises are unhappy because Kiwibank is refusing to say how many have signed up so far.

But memos circulated among post franchises in the past few months and leaked to the media show scores are unhappy with the bank proposal.

Mr Hide said later that it was clear from Mr Toime's answers that franchises would lose their postal agencies if they declined a bank branch.

He said that it confirmed franchises were being bullied by NZ Post and Kiwibank.

Minutes of a meeting last month of Waikato and Bay of Plenty franchises revealed worry about what NZ Post would do if they refused.

Mr Hide said franchises were telling him the bank would cost them, and they were concerned that if they refused the bank they would lose their whole postal business.

"While NZ Post is telling the world it's up to them to choose, it's very clear they will construct reasons for not renewing a franchise if they have not taken the bank.

"It makes a mockery of Jim Anderton saying he's out there helping small business."

NZ Post Franchise Association representative Glyn Jones refused to say what he thought of the possibility that NZ Post would withdraw postal agencies from franchises which declined a bank branch.

The association has negotiated with NZ Post over Kiwibank and believes it is a good deal, but many franchises say the association does not represent them anyway.

Mr Toime conceded under questioning from Mr Hide that Kiwibank would not reach its target of 300 branches by the end of May.

Mr Toime said that when he appeared before the committee late last year he believed Kiwibank would have 300 branches by the end of May, but it had not been a guarantee.

"They are going to be there, but perhaps not by May," he said yesterday. Mr Knowles said negotiations with individual franchises continued.

nzherald.co.nz/kiwibank