Delivery firms urge clamp-down on spate of post office buy-outs

Date: 25/03/1999

By Peter Chapman

EU PARCEL delivery firms are calling on the European Commission to make full use of its anti-trust powers to control the 'shopaholic' behaviour of national post offices now that plans to liberalise the market fully have been put on hold.

The plea follows the latest in a series of forays by Deutsche Post into the market to buy Dutch company P&O Nedlloyd's parcel and logistics unit for €533 million, only two days after plans to launch a timetable for market opening were scuppered by the resignation of the Commission.

The decision by the 20-strong team to refrain from taking any new political initiatives has forced Acting Industry Commissioner Martin Bangemann to put his draft proposals for liberalisation on the back burner until a new team has been appointed.

This has fuelled fresh calls from the European Express Organisation (EEO), which represents private courier companies, for the Commission to use its competition powers to ensure fair trading.

" The liberalisation process will be delayed; that is inevitable," said the EEO's Anton van der Lande. "There is only one way now that we can see things moving and that is through competition policy."

Van Der Lande insists that post offices such as Deutsche Post should not be allowed to make acquisitions funded by profits from their letters business while this segment of the market is still not open to competition.

Deals under attack include six Deutsche Post acquisitions in the past five months and others involving French operator La Poste and the UK's Royal Mail.

Only one case, Deutsche Post's plan to buy German-based courier firm trans-o-flex Schnell-Lieferdienst, has so far been earmarked for a full-scale four-month enquiry under the Union's fast-track merger rules. The other deals face Commission scrutiny for possible breaches of state aid or general competition rules, but the deadlines are far less precise and investigations can take years.

In the meantime, says the EEO, cash-rich post offices are gobbling up rivals and positioning themselves for when markets are finally opened.

The right to 'reserve' certain parts of the market from competition is justified under existing EU rules only where monopolies are necessary to ensure universal service in remote and rural areas. Van Der Lande argues that the vast sums paid by the post offices for acquisitions show that they no longer need this cushion from market forces.

The EEO's hopes of Commission action were boosted by top competition official John Temple Lang, director of information, communication and multimedia, at a conference on post policy earlier this month.

" If a postal monopoly has enough money to go around buying competitors - in particular competitors in other countries - then it suggests there should be a question, at least, about the justification for the monopoly," he said.