Dutch stamp price regulation set to become law

A proposal to regulate stamp prices of Dutch mail company TNT, which analysts have said could hurt the company’s stock market valuation — is set to become law, a member of parliament said on Monday.

Nicolien van Vroonhoven-Kok, a member of Prime Minister Jan Peter Balkenende’s Christian Democrat party, told Reuters the contents of a rule to regulate stamp prices had been agreed.

There might still be some minor tweaks to the language of the law, said Van Vroonhoven-Kok, who is responsible for postal liberalisation.

Asked whether regulators would have the power to lower TNT’s stamp price from the current 0.44 euros for standard mail, she said: “As far as we’re concerned, that’s possible. But I don’t expect it to happen.”

The proposal would set prices for the “universal service” — which includes delivery of letters and parcels and represents a significant part of TNT’s revenue — based on costs and a “reasonable return” initially, with increases in line with inflation in following years.

Such a rule could hurt TNT’s valuation by as much as 10 percent, according to Bear Stearns.

Van Vroonhoven-Kok said the economy ministry and parliamentarians were still discussing other aspects of the country’s new postal law, which is meant to end TNT’s remaining monopoly of letters up to 50 grams, or roughly half of the 2 billion euro Dutch mail market.

The Dutch Labour party, which governs together with the Christian Democrats (CDA) and a small Protestant party, wants to write minimum employment standards into the postal law, which the CDA opposes.

An economy ministry spokesman said the Dutch cabinet would discuss the proposed amendments to the postal law on Friday and declined further comment.