German monopoly body head says Deutsche Post stamps ops subsidize Postbank
Deutsche Post World Net AG’s profits derived from its monopoly on stamps may be more than 25 pct of sales and are so high it even subsidizes some activities of its Postbank unit, according to Martin Hellwig, chairman of the independent Monopoly Commission.
In his written comments published in Berliner Zeitung, Hellwig said the postal regulatory agency RegTP’s decision forcing Deutsche Post to cut stamps prices by an average of 4.7 pct next year do not justify plans by the company to cut 10,000 jobs and close down some postal branches.
He cited examples in the company’s financial reports to show “that there are grounds to assume that the return on sales in Post AG in the monopoly business is over 25 pct.”
He said the 2000 and 2001 financial reports of the company show earnings before interest, taxes and amortisation (EBITA) were about 2 bln eur each year, or around 17 pct of the 11 bln eur sales generated by the division.
He said the Post tries to “draw attention” away from the huge profits made by the stamps division by putting “all possible” non-stamp-related costs as those stemming from stamps division, and cited as an example the costs linked in operating the unit Postbank.
“One can only wait to see how long it would take the other financial institutions to complain to the (European) Commission in Brussels about the cross-subsidy given to Postbank from Post’s monopoly,” Hellwig said.
