Setting a Sale Date German government's majority stake in Deutsche Post may be sold next year

By JOHN PARKER
German government’s majority stake in Deutsche Post may be sold next year Paris Copyright 2001, Traffic World Magazine

The German government plans to introduce legislation that would allow it to sell its majority stake in Deutsche Post as early as next year. Legislation expected to be enacted by the end of the year would reverse an earlier law that requires the government to hold a majority stake in the postal service for at least five years after its initial public offering, which was held last November.

According to Uwe Bensien, a spokesman for Deutsche Post, while the company welcomes the decision by the government, it was not surprised by the move.

“Privatization has always been the goal of the government and Deutsche Post,” he said. “It changes nothing in the way we operate or for our customers. The government owns a majority of the shares but it is not involved in any operational decisions.” The legislation will not affect Deutsche Post’s domestic first-class letter monopoly, recently extended by five years until 2007.

Bensien acknowledges the change in ownership could help from a public relations standpoint in the United States, where United Parcel Service and FedEx Corp. have charged Deutsche Post has unfair competitive advantages because of its government ownership. “For Deutsche Post to be fully privatized probably would be an advantage in some countries, like the U.S.,” he said.

In related news, the European Commission has condemned Deutsche Post for “intercepting, surcharging and delaying” international mail coming into Germany during a dispute with the British postal service. The commission fined the German postal operator a symbolic 1,000 euros, or less than $900, but warned that any future abuse of its dominant position in Germany would be much more costly.

“By imposing a symbolic fine, we recognize the fact that the behavior of Deutsche Post had in the past been condoned by German courts,” EU Competition Commissioner Mario Monti said. “However, the symbolic fine should also be regarded as a clear signal that, now that the situation has been clarified, future abuses of a similar nature will result in severe penalties.” The dispute between the two postal services involved the Byzantine regulations governing international mail and what constitutes illegal remailing. Deutsche Post claimed the British post office, known today as Consignia, was attempting to circumvent its domestic mail operations and intercepted international letters from Britain with German return addresses on them. Deutsche Post refused to deliver the letters until its full domestic tariff was paid. “The price charged for the service was excessive and the behavior of Deutsche Post limited the development of the German market for the delivery of international mail,” the commission ruled.

Deutsche Post and Consignia reached an agreement on the dispute last year but the commission was still obliged to make a ruling in the case, according to Deutsche Post spokesman Uwe Bensien.

“We make it very clear that dominant postal operators such as Deutsche Post may not impede the free flow of mail between member states,” Monti said.

“Companies that have been awarded wide-ranging monopoly rights have a special responsibility not to abuse their dominant market positions by behaving anti-competitively.” Earlier this year, the commission fined Deutsche Post nearly $21 million for subsidizing its commercial parcels operations with letter monopoly profits.

TRAFFIC WORLD, 06th August 2001