Deutsche Post DHL has accused the European Commission of “double standards” and vowed to appeal,after the Commission today ordered Deutsche Post and Bpost to repay around €1 billion in
state-aid.Following a three-year state-aid investigation, the European Commission cleared governmentpayments of €1.9 billion and €52 million respectively to France’s La Poste and Greece’s HellenicPost, but said Deutsche Post must pay back more than €500 million to the German government andordered Belgium to recover €417 million of “incompatible aid” from Bpost, formerly De Post-LaPoste. Bpost said it was reviewing its legal options.
The Commission approved compensation of €5.6 billion granted by Germany to Deutsche Post from1990 to 1995 to cover the cost of the universal postal service. However, it said there had beenincompatible aid to Deutsche Post “in the range of €500 million to €1 billion, resulting from thecombination of high regulated prices and pension relief subsidies”, which had “placed Deutsche Postin a better position than its competitors”. The disputed amount is understood to be “at the lowerend of the range”, or close to €500 million.
The Commission approved €3.8 billion in pension relief paid to De Post-La Poste via the Belgianpension reform of 1997, but said there had been a €417 million “overcompensation”.
In response, Deutsche Post DHL said it will file an appeal with the European Court of Justiceagainst today’s ruling, and that it had “aligned this decision with the German federal government”.
CEO Frank Appel fumed: “The EU Commission’s ruling on a repayment is incomprehensible and has nobasis in fact. It stands in clear contradiction to an earlier EU decision and the outcomes ofsimilar proceedings.” He said DP had already successfully appealed against a previous decision bythe Commission, and that this most-recent investigation had covered much of the same ground.
“If you examine the state aid rulings on other European postal service providers, it becomesquite clear that here the Commission has applied double standards. We are absolutely confident thatthe decision will have no validity in court and are proceeding on the assumption that the amount,plus interest, will be repaid.”
Johnny Thijs, CEO of Bpost, said the Commission’s decision ended a long period of uncertainty,allowing the company to now focus on the future. But he expressed disappointment that the company “must pay back a substantial amount for actions related to the past”. He added: “In legal terms, wealso believe that certain aspects of this decision are in dispute. The Board of Bpost will examinewhether the company will appeal this decision to the European Court.” He said Bpost had thefinancial means to repay the state, and that the universal service, public services and commitmentsto staff and customers “are not jeopardized by this decision on the past”.
DP said that since it is the company’s opinion that today’s state aid ruling cannot withstandlegal review, the payment that is to be made in the next few months would be recorded only in thebalance sheet for 2012. “As a consequence, company earnings both in the past fiscal year and in theyears to come as well as the basis of the dividend that is yet to be proposed for fiscal year 2011remain unaffected by the decision,” the company said. “The liquidity of the Group will betemporarily affected by the payment, but will continue to remain solid.”
DP noted that it had assessed its operational performance in the past fiscal year as“successful”, six weeks before the presentation of its 2011 figures. “I am very satisfied with ourperformance in the past year, a year in which we met the guidance that was repeatedly revisedupwards,” said Appel. “We have shown impressively that we are excellently positioned and that wehave every reason to continue to look optimistically into the future.”
The Commission said EU state aid control allows Member States to compensate, but not toovercompensate, postal operators for the net cost of public service missions, and where postalincumbents – as a legacy of their past as state administrations – are disadvantaged because ofhigher pension costs for civil servants which are not incurred by their competitors, Member Statescan provide relief to the extent that postal incumbents are not thereby put in a betterposition.
European Commission Vice-President in charge of competition policy, Joaquín Almunia, said: “Ourultimate aim is to prevent distortions of competition which would hinder citizens and businessesfrom enjoying the benefits of full market opening that will soon be completed in all Member States.In these four decisions, the Commission has applied the same rules and principles.”
The German International Express Association (BIEK), which has mounted a long legal campaignagainst Deutsche Post on diverse issues, strongly welcomed the Commission’s decision. PresidentGunnar Uldall said: “Chances for competitors will be improved and that will have positive resultsfor consumers.” BIEK represents diverse international express and parcel operators, including UPS,TNT and DPD, which compete with DHL.
