German Deutsche Post appeals cartel watchdog ruling

German postal services company Deutsche Post AG has appealed the ruling of the Federal Cartel Office (FCO), which forced it to offer competitors discounts for its mail dispatch services, the company said on February 22, 2005.

Deutsche Post strives to defend itself from the increased pressure by FCO and by some German politicians to give up its monopoly rights earlier than 2007 as scheduled.

The appeal is aimed at only preventing the immediate application of the decision and Deutsche Post expects the results of the appeal in the next few weeks, company CEO Klaus Zumwinkel said.

The company does not plan to hinder the opening of the market as demanded by the European Commission (EC), banking experts said.

In case the market is opened before 2007, Deutsche Post expects a 200 mln euro (USD264.9 mln) negative effect on its annual sales which, in theory, might lead to some 6,000 job cuts in Germany, Zumwinkel said.

As the company has pledged not to perform any lay-offs in the country until 2008. The negative effect will be compensated by other measures within the company, he added.

The failed legislative initiative of of the German states of Hesse and Lower Saxony for the complete abolition of Deutsche Post’s monopoly on the letter delivery market would also have endangered jobs in the company, Zumwinkel said.

Zumwinkel reiterated his forecast for the company’s 2005 earnings before interest, tax and amortisation (EBITA) of 3.6 bln euro (USD4.77 bln).

The fall out of some 400 mln euro (USD529.7 mln) goodwill amortisations will boost net profit in 2005. Also, Deutsche Post’s loss-making U.S. unit has enjoyed stronger-than-expected growth at the beginning of the year.

Deutsche Post Files Mkt Liberalization Complaint
February 23, 2005 — [Die Welt]
“Deutsche Post, Germany’s national postal services provider has lodged a complaint against the German anti-trust authority. The authority wants the postal market in Germany to become more liberalized and has therefore said that Deutsche Post can enjoy its current monopoly only until 2007. In order to open up the market, the authority has demanded that Deutsche Post allow competitors to carry out activities such as collecting, sorting and delivering letters that are under 100g in weight.