Tag: Germany

It is reported that Deutsche Post, the German postal service operator, may face heavy fines if it is ruled that a decision by the ministry for economic affairs to prolong the company’s monopoly on letter delivery for two years was unlawful. It is said that in 2000, when the decision was made, officials warned against the ministerial decision which ignored a demand by the postal and telecommunications regulatory body for lower postage charges. The German wholesale and retail association BGA had lodged a complaint against the prices imposed by Deutsche Post for letter delivery, adding that the excessive charges had been imposed with the support of the ministry in view of the income that they brought. The court hearing is due on August 7. The BGA believes that other complaints may follow its own.

Deutsche Post AG and the German government Monday defended current mail prices as questions resurfaced about whether they should be lower.
The move comes five days after German regulators ordered the first stamp-price cuts in more than 50 years starting next year – a ruling that spurred the mail and logistics giant to say it would be forced to cut 10,000 jobs.

Germany’s postal regulator has ordered monopolist Deutsche Post to lower its postage rates next year. The move will send the EU’s recent Post edict to the dead-letter file if the EU Commission allows the exchange-listed mail and logistics company to cut its stamp prices rather than repay to the German government 572 million ($566 million) in subsidies that were illegally diverted to its parcel delivery unit in the mid-1990s.
The subsidies in question took the form of overpriced postal rates, supposedly granted to help Post fulfill its public mission of countrywide letter delivery. But these profits were diverted to its parcel business, the Commission said, allowing it to offer its service at dumping prices without showing losses.
In contrast to Post’s letter division, its parcel unit is purely commercial. With an “aggressive rebate policy“ for certain commercial customers, Post was able to gain market share from such big rivals as United Parcel Service, which lodged the complaint.

GERMANY’S postal service joined other parts of the business area yesterday in protesting against government interference in the economy.
Hundreds of post offices would have to be closed, thousands of letter boxes sealed and more than 10,000 postal workers made redundant if the Government insisted on price controls on stamps and other postal charges, Klaus Zumwinkel, chairman of Deutsche Post, said.
The dispute with the Government erupted as Ron Sommer, the beleaguered chairman of Deutsche Telekom, told Gerhard Schröder, the Chancellor, to stop meddling with his company, in which the Government owns a large stake. He told the newspaper Bild: “The state should be confining itself to creating the legal conditions for the opening of the economy.”

After threatening to cut 10,000 jobs and close post offices across Germany, Deutsche Post AG seems to have reconsidered its response to the regulator’s demand for a cut in postage prices.
Deutsche Post chief executive Klaus Zumwinkel said that after “careful discussions” with Economics Minister Werner Müller his company would take appropriate account of the different interests of consumers, shareholders and employees.
On Tuesday evening, the RTP telecoms and postal services regulatory body ordered Deutsche Post to cut the postage on standard letters and postcards by 4.7%. The postal giant – still 69%-owned by the government – responded by saying it would have to consider cutting 10,000 jobs and closing 1,000 post offices nationwide in anticipation of the loss of 1.5 billion euros in earnings by 2007.