Trade Association Contests Deutsche Post's Letter Rates

The German association of wholesale and export traders (BGA) on Tuesday said it is taking action against postal services group Deutsche Post to contest the rates it charges in monopoly areas. It said it is demanding repayments totaling 21,000 euros.

The case could compel German regulators to lower the minimum letter price or prompt similar complaints from numerous other industry groups. A ruling is expected within six months, though a subsequent appeal by either side is possible.

BGA board member Gerhard Handke said that Deutsche Post is charging excessive prices for letter deliveries, and he added that there is no legal basis for the current pricing structure.

The BGA’s complaint is essentially against the German Economics Ministry for an order it gave in March 2000 to prolong the existing tariff structure until the end of 2002. The BGA argues that the existing letter-price system should have expired, as originally planned, at the end of August 2000 or been formally extended by the German postal regulatory authority.

The BGA said it is targeting Deutsche Post rather than the ministry because, for legal reasons, it can’t complain directly against the ministry – and also because the BGA is formally a client of the partially privatized mail company.

Industry observers view the BGA’s complaint as another attempt to force Deutsche Post to make public the cost calculations involved in its pricing system. Deutsche Post rivals have attempted for years to prove that the company is able to charge low prices in parcel delivery, an area that is open to competition, by cross-subsidizing its parcel-delivery business with profits made from its letter-delivery monopoly.