Deutsche Post says cartel office ruling on mail ops may lead to revenue loss

Deutsche Post World Net AG said a decision by the German Cartel

Office to grant mail consolidators downstream access to its networks could lead

to revenue losses in the coming years of no more than the ‘low hundreds

of millions’ of euros.

‘In our view, the Postgesetz (German Postal Act) and the scope of the

exclusive license comply’ with EU competition laws, the company said in its

nine-months results report under the heading of ‘risk report’.

A company spokeswoman said the revenue losses could amount to a ‘maximum of

150-200 mln eur’.

‘We have annual revenues of more than 40 bln eur, so it’s really not large

for us… that is already priced in our shares,’ she added.

The company’s risk report said the German Cartel Office ‘is expected to rule

shortly that Deutsche Post AG is required to grant mail consolidators downstream

access to its networks.’

‘If the rulings result in such an obligation, this could lead to revenue

losses in each of the coming years of no more than the low hundreds of

millions,’ it said.

A German Cartel Office spokeswoman however said today the EU has already

ruled on Oct 20 that a provision in the German Postal Act allowing Deutsche Post

to discriminate against small commercial mail sorters is a violation of EU

competition laws.

Deutsche Post said in its risk report that the European Commission has requested the company for information due to allegation by a third party that Deutsche Post contravenes state aid rules by allowing Postbank to use Deutsche Post outlets at below market rates.

It said the EU has also requested information relating to the sale by the

German government of the complete interest in Postbank AG to Deutsche Post on

Jan 1, 1999.

‘Nevertheless, it cannot be ruled out that the European Commission will

again review this allegation even though it had already concluded in a June 19,

2002 ruling that the acquisition of Postbank involved no grant of state aid,’ it

said.

‘With regard to both allegations relating to the request for information, it

cannot be ruled out that the European commission will find that the facts of the

case constitute state aid,’ it said.

The German cartel office said yesterday it had asked Deutsche Post to

respond by end-November to allegations that it is impeding market competition by

offering discounts of 3-21 pct to major companies for mass mail orders, which it

does not offer to other mail service providers.

mog/wf