Parcel delivery firms raise doubts over takeovers by post offices

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The warning from EEO followed the announcement by the United Kingdom's Royal Mail that it planned to take over Germany's fourth largest private express delivery firm, General Parcel Paket Logistik.

The organisation argued that the European Union's merger control rules did not pay enough attention to how deals were actually financed, focusing instead on the new market power of the combined companies. It also defended the European Commission should probe those acquisitions to ensure that post offices were not unfairly cross-subsidising their purchases by using funds from the letter and small parcel delivery over which they still have a monopoly.

The private courier companies claimed that the post offices were rushing to complete their take-over shopping spree before the European Commission's plans for liberalisation, including strict rules on cross-ownership, took shape.

The European Express Organisation (EEO) raised concerns in January 1999 over the increasing move by different post office companies to acquire parcel delivery firms across Europe.

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