PostComm allows Deutsche Post to set own price levels
Deutsche Post will be allowed to set its own prices when it breaks into the UK business post market, posing an aggressive threat to Consignia’s fading monopoly.
The regulator is set to grant a one-year interim licence that allows Deutsche Post to collect pre-sorted and some unsorted mail from customers in the UK. The group will use rival company Consignia’s network to deliver about 90 per cent of the mail, while the rest will go through its subcontracted delivery services.
Deutsche Post and Consignia will have to agree a fair price between them, says Postcomm. “Deutsche Post must decide what to do,” says a Postcomm spokesman. When asked if there was the potential for Deutsche Post to undercut Consignia on discounts or pricing for bulk mail, he says: “I imagine they will have something to offer but it is up to them.”
The licence comes as Deutsche Post suffers similar political and financial problems as Consignia. Earlier this year, German regulators demanded the group slash postal prices in its home market of Germany from 2003, in a move the company said would lead to job cuts and a E1.5bn (#950m) dent in profits by 2007.
Consignia also faces competition from Hays, Business Post Group, and Dutch Postal Operator TNT Post Group NV.
