EP Europost to Muscle In on Deutsche Post's Mass Mail Monopoly
HB/svu BRUSSELS. Postal-service monopolist Deutsche Post AG is set to face tougher competition on its home market.
TNT Post Groep (TPG) of the Netherlands and Hermes General Service (HGS), a subsidiary of German mail-order giant Otto-Versand, have set up a joint venture that is to compete against Deutsche Post on the mass-mail delivery market.
TPG chief Harry Koostra said: “After talks with several major despatch firms in Germany, we reached the conclusion that there is a great need for a further provider.”
TPG and HGS intend to ensure that their new joint venture, EP Europost AG, will not just be a niche player, operating in the shadow of Deutsche Post. Germany is Europe’s largest market for mass mail deliveries such as catalogues and mailshots. The segment accounts for around one quarter of the letter-delivery market, which TPG estimates to have a volume of 2.8 billion euros.
EP Europost is to serve around 36 million addresses in Germany over the coming years.
Provided the EU cartel authorities approve the venture, EP Europost can go into operation from 1 January 2002.
Analysts said that the venture showed TPG to be making early efforts to gain footholds on other European markets, unlike Deutsche Post. Rabobank analyst Hann Verheijn said that the German group would be unable to respond as quickly as it used to because it is still busy digesting recent acquisitions, with a total volume of 18 billion euros. He estimated that TPG will be able to double its foreign sales from the current 300 million euros in four years.
HGS, which will hold a 29% stake in EP Europost, will incorporate 3,500 parcel shops, 500 support points and 65 depots into the venture.
Until 2007, Deutsche Post will hold a monopoly over the delivery of letters of up to 200 grams as well as for mail shots of up to 50 grams. But other companies can still compete in these areas if their service includes some form of added value, for example if they provide 24-hour deliveries.
