2008 Competitive Market Review L13983
2008 Competitive Market Review
Read MoreTag: TNT
Royal Mail hits TV screens with new campaign (UK)
Royal Mail is to change the focus of its marketing and communications from the consumer sector toward businesses, partly to remind big companies that it still exists, but, more significantly, to position the brand as the postal operator of choice for small and medium-sized firms.
This repositioning will begin this month with a ‘Partners for Growth’ campaign targeting the UK’s 4.3m SMEs. An above-the-line push, by ad agency Abbott Mead Vickers BBDO, will comprise TV, press, direct and digital activity.
The drive will direct prospective customers to a 15-step online questionnaire that asks respondents about their business needs. Within two hours, those who have completed the survey will receive a personalised ‘growth pack’ containing information about how Royal Mail can help them. The idea is to publicise some of the brand’s lesser-known business services, including data provision and media consultancy.
Deutsche Post VAT privileges cut
German Chancellor Angela Merkel’s Cabinet agreed to reduce a tax break granted to Deutsche Post AG while extending the benefit to the mail carriers’ competitors.
Cabinet members meeting in Berlin agreed that from 2010 Deutsche Post will lose an exemption from charging value-added tax on some services such as bulk business mail. At the same time, the tax privileges given to Deutsche Post will be extended to competitors that match the former monopoly in providing universal services.
The step reflects Germany’s aim to “stay abreast of liberalization in the postal market,” the government said in a statement, adding that the plan meets a European Union demand for changes in value-added tax exemptions.
The measures, if approved by parliament, will mean Deutsche Post facing competitors who enjoy VAT privileges at the same time as banks and mail-order companies eat into its core business activities. The Bonn-based company has long fought against an amendment of its tax privilege, citing the costs of fulfilling its charter to provide a universal post service to Europe’s most populous nation.
TNT strengthens international express network
TNT announced that it will add eight new branches to its international express network in China by the end of the year. The expansion, which forms part of TNT’s investment in China to strengthen its international express network, will bring the total number of TNT International Express branches in China to 34. In addition to its extensive international express network, TNT, through its wholly-owned subsidiary Tiandi-Hoau, also operates China’s largest private domestic road network, which consists of 1,250 depots.
The TNT International Express branches at Dongguan and Zhongshan will begin their operations in the end of September 2008. This follows the opening of two earlier branches in Foshan, which opened on 1 August 2008 and in Shunde, which started operations on 1 September 2008. In addition, another four TNT International Express branches will be set up in Nanning, Wenzhou, Kunshan and Shanghai Pudong by the end of the year.
Draft bill regarding VAT in the German postal market: TNT Post demands improvements
TNT Post in principle welcomes the fact that the German Federal Government is revising the VAT regulation in the postal market. This is a necessary step because the current VAT exemption for Deutsche Post AG is contrary to EU law and impedes competition. However, the present draft bill will not encourage competition in the postal market.
Inexact phrasing that is open to various interpretations enables Deutsche Post AG to maintain its VAT exemption. Through this VAT exemption, the German State has foregone tax revenues of up to EUR 500 million per year. There is no substantive reason for the long transitional period up to 1 January 2010.
Although the draft bill is a step in the right direction, it will not encourage fair competition conditions. TNT Post therefore calls upon the legislature to make improvements to the draft bill.
The current VAT exemption for Deutsche Post AG protects half the total volume of mail in its favour and thus distorts competition. The European Commission already opened an infringement procedure against the German State in early 2006. Together with the excessive minimum wage for postal services (a cost increase of over 20 pct) and the lack of price control (Deutsche Post AG discounts of up to 26 pct), the VAT disadvantage suffered by the new postal service providers (a cost disadvantage of 19 pct) prevents fair competition in the postal market.
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