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German government says postal reform is back on the agenda

Tuesday, January 22nd, 2013

The German government said yesterday that its delayed postal reform amendment should be passed at some point during the current legislative period.

The proposals from German economics minister Philipp Rösler would require Deutsche Post to submit details of significant new business mail contracts to the regulator, the Federal Network Agency, for approval.

The move would add controls to prevent the national postal operator from setting below-cost prices that undermine the ability of competitors to attack customers.

Proposals would also strengthen the rights of appeal for mail sector competitors, who have made a number of claims about “price dumping” that have prompted regulatory investigations. And, potentially reduce administrative red tape for competitor mail firms.

Deutsche Post has a 90% share of the German mail market, but competitors have struggled to make in-roads into the EUR 9bn market since full liberalisation in 2008.

The federal competition authority, the Monopolies Commission, last year backed the government’s proposals to increase postal industry competition, saying that regulators currently did not have the powers to prevent abusive behavior by Deutsche Post.

Among the Commission’s wish-list was the ability to peruse the details of individual mail contracts with large Deutsche Post customers.

However, the government decided in the autumn last year to hold off on its postal amendment for fears it would stall in the Parliament.

It now appears that in the German Parliament, some political wrangling ahead of state elections has seen opponents to the postal reform measure at a federal level offered a trade-off, with the government allowing certain concessions on immigration legislation in return for support on the postal bill.

At a press conference yesterday, a spokesperson for the Federal Ministry of Economics, Tanja Kraus, confirmed that the Postal Services Act amendment should be passed this legislative period – before Germany breaks for elections this September or October.

“As far as the ministerial schedule is concerned, we anticipate a speedy referral to the Cabinet,” said Kraus.

“A bit more fairness”

The German mail and courier industry association, the BdKEP, which has long been pushing for the amendments to strengthen competition in the mail market, welcomed the “surprising” resurgence of the postal amendment.

However, the BdKEP warned that “nothing has been decided” with respect to the reform measure, and that it is still unclear whether the upper house of the German Parliament, the Bundesrat, will play ball.

The industry association, which represents generally mid-size mail and courier firms, said the proposed Postal Services Act amendment would bring “a bit more fairness in competition” within the market.

Rudolf Pfeiffer, the BdKEP chairman, said: “This would make it difficult to offer very low prices to certain large customers at the expense of smaller shippers and competition. It would mean another step towards fair competition in the postal market.”

Source: Post&Parcel/German government/BdKEP

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