Deutsche Post to axe bulk mail unit First Mail after court ruling

Deutsche Post has confirmed that it will close its Düsseldorf-based budget business mail delivery unit First Mail by the end of the year. The decision followed last week’s court ruling, in which the company was found to be providing below-cost pricing to its business mail customers in order to drive out competition.

Deutsche Post was ordered by the Supreme Administrative Court of the North Rhine-Westphalia region to increase its bulk mail delivery prices within a few days.

But, instead the company will shut down the entire operation.

Alexander Edenhofer, a spokesman for Deutsche Post’s Mail division, told Post&Parcel today: “I can confirm that we will close the mail business of First Mail by the end of the year. Most of the 1,600 employees, including the trainees, will be transferred to other areas of Deutsche Post, limited contracts will not be extended.”

Edenhofer added that he could not yet say what the impact of the closure would be on First Mail customers.

German regulators at the Federal Network Agency told Deutsche Post in June that allowing First Mail to charge lower-than-cost postal rates was breaching competition rules. Deutsche Post challenged the ruling, but last week lost its appeal.

A separate lawsuit on the matter was also filed against the regulator’s decision, which is yet to be decided.

German media reports earlier this week suggested the end was nigh for First Mail after the company reportedly lost its biggest customer, Westdeutsche Algemeine Zeitung, in the wake of the court order to raise prices.