The German government today ordered Deutsche Post DHL to repay EUR 298m in state aid and interest as required by the European Commission.
The EU executive branch had decided back in January that the German postal service benefited from pension subsidies from the German government during the late 1990s and early 2000s that were not in line with market competition rules.
Deutsche Post had been allowed to include the issue of pension considerations when it increased postal rates, which the EU Commission decided amounted to illegal state aid.
Europe’s biggest Post filed an appeal last month against the ruling, which was made after a Commission investigation that began in 2007, which itself came on the back of a series of probes and appeals stretching back to original complaints from rival UPS in the 1990s.
One positive today was that Deutsche Post had been expecting the government to calculate its state aid repayment in the region of EUR 500m to EUR 1bn, with today’s demand coming in considerably below expectations.
In a statement, Deutsche Post said today that it was continuing with its appeal as filed with the European Court of Justice, and stated its confidence that the state aid ruling “cannot stand legal review”.
The company stated: “The ruling is incomprehensible and has no basis in fact as the Commission addressed matters they had already examined during similar state aid proceedings from 2002, matters that had ended in a defeat for the Commission in September 2010 as a result of a company appeal in the ultimate legal instance.”
Deutsche Post said it would be recording the payment to the German government in its balance sheet for 2012, but said its earnings would remain “unaffected” by the decision with its liquidity remaining “solid”.
Source: Post&Parcel/Deutsche Post DHL