Deutsche Post World Net chairman Klaus Zumwinkel today issued a major call for harmonised postalliberalisation in the European Union and fair competition in the domestic German mail market.
Addressing the company’s annual results press conference, Zumwinkel said that at presentthere is an “uneven playing field” in the domestic market that is due to be fully liberalised onJanuary 1, 2008. German postal law obliging licensed competitors to maintain social standards onpay and working conditions was not being upheld properly, he claimed.
Competitors were paying their staff low wages that forced them to rely on benefit payments,while Deutsche Post paid staff on the basis of collective agreements, he declared. If Deutsche Postlost 20% market share, then 32,000 of its 160,000 postal jobs would be at risk. “We call for theapplication of binding minimum standards on work and social conditions for all suppliers,” he said.
Zumwinkel reiterated that Deutsche Post had no plans to change the standard of its universalservice, including six days a week delivery, once its legal obligation to provide the universalservice expired on January 1, 2008. Deutsche Post would review its “employment pact” with postalstaff next spring once German domestic liberalisation had been clarified, he added.
Asked about prospects for Deutsche Post’s VAT exemption on mail and parcels up to 20kg oncethe domestic market was fully liberalised, Zumwinkel said he expected that “an intelligentcompromise” would be found, but he could not imagine that VAT at 19% would be added to the price ofprivate letters at one go.
Referring to EU postal liberalisation, Zumwinkel commented: “There is no majority forliberalisation in Europe that would start on January 1, 2009.” He said it was “troubling” that “ourwestern and southern neighbours” were not trying for complete liberalisation at that time. But headmitted that Deutsche Post could live with a situation where some EU member states opened theirmarkets 2-3 years later.
For 2007, Deutsche Post is expecting its mail business to again generate about €2 billonworth of operating profits but sees a risk that in 2009 the mail division’s EBIT could drop by10-20% from the 2006 level both due to increased competition and a market decline of about3-5%.
