Level playing field indicator for addressed mail markets in the Netherlands, Germany and the UK
Level playing field indicator for addressed mail markets in the Netherlands, Germany and the UK
Read MoreTag: TNT
CEO of Springer's troubled postal arm to quit (Germany)
The head of Axel Springer’s troubled postal business PIN Group is quitting and withdrawing an offer to buy the unit, according to a magazine report on Tuesday, casting uncertainty over PIN’s future.
Last week, German publisher Springer pulled the financial plug on its loss-making mail service company and said it was looking to sell its majority stake.
Springer has been considering options for its stake in PIN ever since the German government last month agreed to impose a minimum wage in the sector higher than that paid by PIN.
The publisher said it was now no longer willing to provide more financial support to PIN group, which PIN Chief Executive Guenter Thiel has said lost 50 million euros this year.
On Tuesday, German magazine Focus said that Thiel has told PIN Chairman Bodo Hombach he will withdraw his offer to buy the company and will resign from his post. PIN was not immediately available for comment.
Springer, publisher of Europe’s best selling tabloid Bild, acquired a majority stake in PIN for 510 million euros (USD 741 million) earlier this year in anticipation of the liberalisation of the postal market in Germany. Deutsche Post loses its domestic mail monopoly next year.
The publisher hoped to challenge Deutsche Post by merging the PIN business with Dutch TNT’s German mail division, a person familiar with the matter told Reuters. But those plans were thwarted by the agreement on minimum pay.
Read MoreRoyal Mail review likely to prompt call for split
A wide-ranging review of the effect of competition on Royal Mail is expected to be announced today amid concerns that the group’s ability to provide a core service is being damaged.
However, the review is also likely to trigger strong pressure for a major revamp of Royal Mail, including splitting it in two.
As part of its licence to operate, Royal Mail must provide a universal service, meaning that post can be sent anywhere at a flat rate.
The postal group has asked Postcomm, the industry regulator, to modify this obligation to reflect its costs.
It has been unsuccessful in its request, although it has been allowed a series of stamp price rises.
In the review, rival postal operators, such as TNT and Business Post, are likely to be asked to help to fund Royal Mail’s universal service obligation.
John Grogan, the Labour MP for Selby, who has campaigned to keep full public ownership of Royal Mail, said: “If the private sector companies are strong enough, then I think they should make a contribution to the universal service.
The rival players are likely to resist such moves because they claim that they are disadvantaged by Royal Mail charging too much for them to use its infrastructure and also that Royal Mail is exempt from VAT while they have to charge it.
Instead they are expected to use the Government’s review to demand that Royal Mail’s operations are split up to promote more competition.
They want to see Royal Mail’s letters division, with which they compete, separated from its network operations, which they have to use for the final-mile delivery.
Read MoreTNT to undercut German governments planned minimum wage for postal sector
Deutsche Post AG rival TNT NV plans to introduce its own, lower pay scale in response to the German government’s planned introduction of a minimum wage in the postal sector, Financial Times Deutschland reported.
‘We will insist on the independence of our pay structure and if necessary do so via the courts,’ TNT Post Germany CEO Mario Frusch told the newspaper.
TNT, which is number two to Deutsche Post in the German mail market, plans a minimum wage of no more than 7.50 eur per hour, Frusch added.
This compares to the 9.80 for the industry contained in the government bill due to go before the upper house of parliament on Dec 20.
Read MoreDutch government rejects calls for partial liberalisation of Dutch postal market
Economic Affairs State Secretary Frank Heemskerk has rejected a request from postal company Sandd BV for a partial liberalisation of the Dutch domestic postal market next year, the Economic Affairs Ministry said.
Sandd said yesterday it sent a letter to the state secretary proposing that newcomers to the Dutch postal market be allowed to deliver a limited amount of letters in 2008, despite the government’s decision last week to postpone the planned Jan 1 liberalisation of the market.
Under a liberalised market, TNT NV would lose its monopolistic position in the delivery of letters weighing under 50 grams.
But in its letter to Heemskerk, Sandd requested permission to deliver no more than 50 mln letters weighing less than 50 grams until the Dutch market could be fully liberalised.
It said the partial liberalisation of the market would allow Sandd to meet contractual agreements that had been signed in expectation of full market liberalisation.
But a ministry spokesman confirmed a report in newspaper Het Financieele Dagblad this morning that Heemskerk rejected the proposal.
‘We can’t tolerate a partial liberalisation because we can’t make a distinction between one company and another. It is too complex,’ the spokesman said, adding that the government was legally able to postpone the liberalisation.
In postponing the complete liberalisation last week, Heemskerk said there are too many uncertainties regarding the postal market.
The state secretary will now issue an evaluation of the postal market at the end of February and if concerns are resolved, the market can be fully opened from April 1 at the earliest.
‘We can open the market on a quarterly basis,’ the spokesman said.
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