State-run Ceska posta requests monopoly over junk-mail competition
The Chamber of Deputies economic committee voted Oct. 20 in favor of granting Ceska posta a price advantage over potential competitors. If signed into law, the decision would fortify Ceska posta’s monopoly over home delivery of direct mail by requiring lone competitor Mediaservis to charge a higher rate. The move would effectively cost Mediaservis its 10 percent share of the market.
The proposed amendment to the law regulating postal services would require competitors of state-run Ceska posta to charge 19 Kc (80 cents) for delivering addressed mail weighing less than 100 grams. Ceska posta delivers the same mail for 6.50 Kc.
Current law does not specify whether direct mailings, or junk mail, fall under Ceska posta’s state-approved monopoly. Ceska posta believes it does and has asked the government to clarify the law. “All we want is to have clear, unambiguous rules mandatory for everyone,” Ceska posta spokesman Ladislav Vancura said.
Direct mail generates 5 billion Kc a year in the Czech Republic, according to the Association of Direct Marketing and Mailing Services (ADMAZ).
Previous attempts by Ceska posta to chase Mediaservis out of the market have failed. Ceska posta launched a new attack on Mediaservis in October, requesting Parliament to change the law.
Left-wing members of Parliament supported Ceska posta’s efforts and said the change was needed to keep the postal service on firm financial footing. “Ceska posta is obliged by law to deliver all mail, including mail that does not bring a profit,” said Pavel Hojda, a communist member of the Economic Committee.
Right-wing parliamentarians have opposed the proposal, saying it encroaches on free enterprise, but they were outnumbered on the committee. “The law should remain unchanged,” Civic Democrat Karel Sehor said. “There are many other companies that can provide this service. Let them compete and the market will regulate postal services.”
Mediaservis was disappointed by the decision. “It was purposefully meant to protect a state company against a private company,” Mediaservis CEO Michal Koliandr said. “Such a decision has no place in a market economy.”
The company plans to appeal the decision to the European Commission and is considering filing a lawsuit against the Czech government to recover potential damages.
Tomas Hajek, executive director of ADMAZ, said Ceska posta should focus on increasing efficiency in delivering the public mail instead of trying to kill competition in the direct-mail market.
The proposal now goes for a second reading in Parliament in November. If approved by the Chamber of Deputies, it moves to the Senate and then to President Vaclav Klaus for signing.
Katya Zapletnyuk can be reached at [email protected]
