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Deutsche Post, the German postal service operator, has reacted to costly demands by the EU commission and the German postal and telecommunications regulator with the introduction of a five-point plan, the fourth point of which is the so-called ‘Star Programme’, launched in February with the aim of boosting company’s share value. The company is to appeal against a demand by the EU that it repay state subsidies of 850m euros, although this is unlikely to lead to the postponement of the repayment. The costs of the reduction in postage charges demanded by the postal regulator are to be balanced by job cuts and a reduction in the number of post offices and mailboxes.

Deutsche Post, the German postal and logistics operator gearing up to enter the UK market, yesterday warned its profits would slump by 10%-15% this year because of the weak global economy.
The company, which has applied for an interim UK licence to deliver some 40m pieces of business mail a year, said net first-half earnings fell 85% to just euros 155m (pounds 97m) after the EU ordered it to repay euros 572m in state aid.
The group, which is expected to make serious inroads into loss-making Consignia’s previous UK monopoly from early next year, also expects annual earnings to fall euros 300m over the next five years because of price cuts ordered by the new German regulator.