Greeks under fire after post price hikes

Date: 28/06/01

By Peter Chapman

EUROPEAN Commission watchdogs have been asked to step in after the Greek post office announced shock price hikes that customers say could drive them out of business. Rates for letters and parcels were increased on 11 June by an average of 70%, and industry groups claim they were neither warned nor consulted beforehand.

Alistair Tempest, director of European direct marketing lobby FEDMA, says his switchboard was inundated with Greek members complaining that the price increases could force firms to abandon mailings planned months in advance, and could even force them out of business. "One said he was throwing away a room full of letters that had been ready to send, simply because it had become too expensive to deliver them," said Tempest.

FEDMA sources say it has now fired off letters - presumably at normal Brussels stamp rates - to Frits Bolkestein's post unit and Mario Monti's competition department to warn officials.

The group argues that the Greeks have clearly breached EU postal directive rules which state that prices should be "transparent, affordable and related to real costs".

They also say the Greeks could be flouting EU competition law by abusing their dominant position on the market, granted by the government.

Tense negotiations between the post office and its customers yielded promises of slight reductions in the planned new tariffs. These would cut the price rise of letters by 15% and for parcels by 40%. That would mean letter prices would only rise by 37-40% and parcel prices would rise by 7%.

But industry says these charges are still far too high. In the meantime, FEDMA said the firms are seeking an injunction from local Greek courts to block the new tariffs.

Athens justified the rises by claiming that local stamp prices are lower than those in other EU member states. But FEDMA says the price hikes are seen by its Greek members as a cynical attempt to fatten-up the postal operator ahead of its partial privatisation later this year.

The government is selling 25% of the company, with France's La Poste, Dutch operator TPG and Germany's Deutsche Post on the shortlist of bidders.

State-owned La Poste has been on a shopping-spree in a bid to keep pace with Deutsche Post. In the past six months it has spent €750 million, snapping up British and Irish units of distribution firm Myne Nickless. It has also taken control of Deutscher Paket Dienst, Germany's second biggest parcel firm.

European Commission watchdogs have been asked to step in after the Greek post office announced shock price hikes that customers say could drive them out of business.