Letter monopoly
Encyclopedia
The Letter monopoly was enshrined in the German Postgesetz law, and until the end of 2005 it granted an exclusive license to the German post office, Deutsche Post, for the transport of letters and catalog deliveries of up to 100 grams. For the period 2005—2007 this limit was reduced to 50 grams. In this way it provided a monopoly
situation, even though only over a part of the postal market. The letter monopoly was often justified in connection with the provision of universal service by the state.
(Bundesnetzagentur, BNetzA) has licensed the professional transport of letters and mail, to which no restriction of weight applies. However the relevant providers were obliged to provide, by 31 December 2007, so-called "higher-valued services", such as same-day express delivery or collection from the sender by the post office. Thus additional costs, which make it usually impossible for the licensees, resulted in letters to set more favorably than the German post office AG in the "normal delivery" in the comparison to the usual letter dispatch. With the cessation of the postal monopoly on 1 January 2008 the requirement to provide "higher-valued services" also fell away for post office competitors.
Problems for competitors under the new arrangements include that Deutsche Post
is exempt from the value added tax, while its competitors are not. Furthermore the post office does not have to pay accident insurance for its employees. Some possible competitors have lodged complaints with the German Federal Constitutional Court
and/or the Federal Finance Court
. The Hermes
logistics group requested abolition of the value added tax obligation on 12 December 2007 with the Federal Department of Finance starting from 1 January 2008. The decision of the Ministry is still pending.
There are estimated to be 1000 enterprises in Germany which offer the delivery of letters. Many of these are small, and may be threatened by the new arrangements. In the long-term, as in other countries in which the letter market was liberalized and/or completely opened, the former state enterprise Deutsche Post
can expect to maintain a market share of over 90%. It is questionable whether a close oligopoly can develop, in which a few different, well-financed enterprises can take part alongside Deutsche Post
.
for post office enterprises in Germany. After the trade union ver.di
came to an agreement with the postal services employers' association for a collective agreement specifying a minimum wage of 8.00 – 9.80 euro per hour, this was sharply criticized by the private post office enterprises. Deutsche Post
used its leadership in the employers' association of postal services to dictate high minimum wages for the private post office enterprises, which no longer allowed them to fairly compete. The private post office enterprises organized themselves in the employers' association new letter and delivery services (NBZ), which demanded significantly smaller wages of 6.00 – 7.50 euro per hour. The Federal Government chose not to interfere into this controversy of the post office enterprises.
See also: :de:Gewerkschaft der Neuen Brief- und Zustelldienste
In German
Government-granted monopoly
In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of...
situation, even though only over a part of the postal market. The letter monopoly was often justified in connection with the provision of universal service by the state.
Abolition of the letter monopoly
Since 1998, the German Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and RailwaysFederal Network Agency
The Federal Network Agency is the German regulatory office for electricity, gas, telecommunications, post and railway markets. It is a federal government agency of the German Federal Ministry of Economics and Technology and headquartered in Bonn....
(Bundesnetzagentur, BNetzA) has licensed the professional transport of letters and mail, to which no restriction of weight applies. However the relevant providers were obliged to provide, by 31 December 2007, so-called "higher-valued services", such as same-day express delivery or collection from the sender by the post office. Thus additional costs, which make it usually impossible for the licensees, resulted in letters to set more favorably than the German post office AG in the "normal delivery" in the comparison to the usual letter dispatch. With the cessation of the postal monopoly on 1 January 2008 the requirement to provide "higher-valued services" also fell away for post office competitors.
Problems for competitors under the new arrangements include that Deutsche Post
Deutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
is exempt from the value added tax, while its competitors are not. Furthermore the post office does not have to pay accident insurance for its employees. Some possible competitors have lodged complaints with the German Federal Constitutional Court
Federal Constitutional Court of Germany
The Federal Constitutional Court is a special court established by the Grundgesetz, the German basic law...
and/or the Federal Finance Court
Federal Finance Court of Germany
The Federal Finance Court is one of the five federal supreme courts of Germany. It is the federal court of appeals for cases of tax and customs law, hearing appeals from the Finanzgerichte ....
. The Hermes
Hermes
Hermes is the great messenger of the gods in Greek mythology and a guide to the Underworld. Hermes was born on Mount Kyllini in Arcadia. An Olympian god, he is also the patron of boundaries and of the travelers who cross them, of shepherds and cowherds, of the cunning of thieves, of orators and...
logistics group requested abolition of the value added tax obligation on 12 December 2007 with the Federal Department of Finance starting from 1 January 2008. The decision of the Ministry is still pending.
There are estimated to be 1000 enterprises in Germany which offer the delivery of letters. Many of these are small, and may be threatened by the new arrangements. In the long-term, as in other countries in which the letter market was liberalized and/or completely opened, the former state enterprise Deutsche Post
Deutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
can expect to maintain a market share of over 90%. It is questionable whether a close oligopoly can develop, in which a few different, well-financed enterprises can take part alongside Deutsche Post
Deutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
.
Minimum wages for postal employees
In September 2007 ferocious debate surrounded a minimum wageMinimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
for post office enterprises in Germany. After the trade union ver.di
Ver.di
-External links:* * on the ver.di homepage...
came to an agreement with the postal services employers' association for a collective agreement specifying a minimum wage of 8.00 – 9.80 euro per hour, this was sharply criticized by the private post office enterprises. Deutsche Post
Deutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
used its leadership in the employers' association of postal services to dictate high minimum wages for the private post office enterprises, which no longer allowed them to fairly compete. The private post office enterprises organized themselves in the employers' association new letter and delivery services (NBZ), which demanded significantly smaller wages of 6.00 – 7.50 euro per hour. The Federal Government chose not to interfere into this controversy of the post office enterprises.
See also: :de:Gewerkschaft der Neuen Brief- und Zustelldienste
Chronology of events
- In 2002 on the initiative of Federal Minister Werner Mueller the Federal Government amends the Postgesetz, so that the termination of the letter monopoly is delayed from the end of 2002, until the end of 2007. The agreement between the CDUChristian Democratic Union (Germany)The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
opposition at that time and the Red-Green coalition government came just two minutes before the end of the period for the extension of the monopoly, at 11:58 pm - 12 November 2003: The German Federal Constitutional Court rules Deutsche PostDeutsche PostDeutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
's letter monopoly to be constitutional. Thus it remains, with a restriction to the period 2005--2007. - 13 December 2004: The HessianHesseHesse or Hessia is both a cultural region of Germany and the name of an individual German state.* The cultural region of Hesse includes both the State of Hesse and the area known as Rhenish Hesse in the neighbouring Rhineland-Palatinate state...
minister of economics Alois Rhiel (CDUChristian Democratic Union (Germany)The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
) and the minister of economics of Lower SaxonyLower SaxonyLower Saxony is a German state situated in north-western Germany and is second in area and fourth in population among the sixteen states of Germany...
Walter Hirche (FDPFree Democratic Party (Germany)The Free Democratic Party , abbreviated to FDP, is a centre-right classical liberal political party in Germany. It is led by Philipp Rösler and currently serves as the junior coalition partner to the Union in the German federal government...
) announce an initiative in the German upper house Bundesrat to abolish the letter monopoly by 2006. - 21 March 2007: Ministers of Finance Peer SteinbrückPeer SteinbrückPeer Steinbrück is a German social democratic politician. From 2005 to 2009 he served as German Federal Minister of Finance in the cabinet of Angela Merkel.- Early political career, Minister President :...
places the abolishment of the letter monopoly in doubt, since other European UnionEuropean UnionThe European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
countries refuse to allow foreign enterprises the right to deliver mail.
- 24 April 2007: The Grand Coalition (SPDSocial Democratic Party of GermanyThe Social Democratic Party of Germany is a social-democratic political party in Germany...
/CDUChristian Democratic Union (Germany)The Christian Democratic Union of Germany is a Christian democratic and conservative political party in Germany. It is regarded as on the centre-right of the German political spectrum...
) agrees not to seek change to § 51 of the Postgesetz again. The monopoly on letters under 50 gram thereby lapses on 1 January 2008.
- 31 December 2007: The Deutsche Post AGDeutsche PostDeutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
monopoly for letters with a maximum weight of 50g comes to an end.
External links
In German
- Regulierung Postmarkt – Information der Bundesnetzagentur,
- Auszug aus dem Postgesetz
- Das Thema Briefmonopol bei kepspeed.de
- Das Briefmonopol bei Posttip.de
- Europäischer Postmarkt: Liberalisierung auf 2011 vertagt. Warum die EU-Abgeordneten sich auf eine spätere Wettbewerbsöffnung des Postmarktes geeinigt haben (Euros du Village)