Norway Post is to enter the Danish postal market by setting up a CityMail subsidiary in itsneighbouring country. CityMail, in which Norway Post holds 57 per cent, is the main competitor to
Posten in the Swedish mail market.Norway Post said the Danish CityMail postal company would go into operation in 2007, initiallyoffering customers in the Copenhagen area a new distribution service for mail weighing over 50grams. The service could be extended to other parts of Denmark later. When the Danish postal marketbecomes fully liberalised, probably in 2009, this service may be extended to include all lettermail.
“We wish to offer our customers Nordic postal solutions. Establishing CityMail in Denmark willcomplement our strategy and strengthen Norway Post – in the domestic market, too,” said CEO DagMejdell. “We really want to make a start in Denmark and have a number of Nordic customers who haveencouraged us to do so. To begin with we are concerned with adapting the Danish rules, in order toestablish fair competitive terms in which we can operate a postal service, in such a way that makesit easy to be a consumer,” he added.
In response, Post Danmark said the announced market entry of Norway Post next year was neither asurprise nor a worry. “We have been prepared for this situation for a long time,” commented CEOHelge Israelsen. “The distribution of letters weighing more than 50 grams is open to competition,which means that CityMail is free to enter into this market. However, I do not expect that the newplayer will be able to offer products or a quality that can match those of Post Danmark,” hedeclared.
Post Danmark noted that it currently cooperates closely with Norway Post in the internationalparcels market via their joint venture Pan Nordic Logistics. “We are now business partners withNorway Post in one area and business rivals in another. Such are the conditions for the industryand, as a matter of fact, we do not find there is anything unusual or dramatic in this situation,”Israelsen added. In 2004, Post Danmark collected and distributed 1.3 billion letters. Approximatelytwo-thirds of its revenue stem from the distribution of letters as well as newspapers andmagazines.
Founded in Sweden in 1991 and active since then in the liberalised Swedish market, CityMaildistributes pre-sorted, addressed mail, such as direct mail, newsletters and magazines forcompanies and public authorities. It covers about 40 per cent of Sweden’s population throughdeliveries in the Stockholm, Gothenburg and Malmø areas, and on the island of Gotland. CityMail,with some 250 million items per year, claims an 11 per cent market share for Swedish industrialpost. Norway Post has an option to buy the remaining 43 per cent in the first quarter of this year.
