Regulator stamps Swiss Post as too expensive

Is Swiss Post's monopoly beginning to fall? Keystone

The watchdog of Switzerland's postal services says that Swiss Post is "massively overcharging" for postage stamps every year - by SFr300 million ($266.4 million).

This content was published on December 30, 2007 - 14:08

Martin Kaiser called for liberalisation of the market, a move also supported by Swiss Economics Minister Doris Leuthard.

Kaiser said the Swiss have to pay for letters weighing up to 20 grams some of the highest prices in Europe.

He told the NZZ am Sonntag newspaper that the charges affected 90 per cent of letters sent.

"I'm talking about private customers and small- and medium-sized enterprises. We worked it out and came to a sum of more or less SFr300 million a year. A substantial reduction of postal stamp charges would therefore be possible," he said.

Kaiser, who is leaving his position of post regulator at the end of the year, said that his supervisory body, PostReg, had repeatedly tried to discuss the situation with Swiss Post but without success.

Swiss Post, which is fully owned by the government, had argued that it needed to stock up its pension fund and capital base – arguments that Kaiser said were no longer valid.

No authority

"We could not reduce the prices because we lack the authority to do so. That lies with [Communications Minister Moritz] Leuenberger," he commented.

Kaiser also said that the costs for basic services provided by Swiss Post were considerably lower than it claimed.

He called for a rapid opening of the market, saying that as long as Swiss Post had a monopoly, its network of post offices was only a cost factor.

It would be a strategic success factor as soon as Swiss Post was fully open to competition, he commented, adding that having a monopoly did not save a single job.

In a related development Economics Minister Doris Leuthard said she was also in favour of liberalisation at Swiss Post.

She told the same Sunday newspaper that the change of Swiss Post to a public limited company was "conceivable". However, she did not rule out a partial liberalisation.

Business principles

"Swisscom [the former telecommunications monopoly] is today a limited company... In a competitive system, Swiss Post should also be able to work according to purely business principles – and that concerns staff too," she commented.

The Swiss government is to decide in the coming weeks about the speed and next steps in the complete liberalisation of the Swiss postal market.

On Thursday, Swiss Post confirmed that about ten per cent of its more than 20,000 letter boxes would disappear by 2010, citing lack of use.

The company has been renewing letter boxes around the country with more secure models, an operation costing SFr30 million.

Swiss Post spokesman Richard Pfister said that before the company took a decision to eliminate a box, it discussed the matter with the Swiss commune concerned.

swissinfo with agencies

Key facts

During the first nine months of the year, Swiss Post recorded a profit of SFr699 million, a 16.3% increase over the comparable period in 2006.
Profit at PostMail was down to SFr184 million (SFr264 million).
The company, affectionately called the "yellow giant", had a staff of 33,444 at the end of September.

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The Postal Services Regulation Authority (PostReg) is a specialist independent authority attached to the Swiss communications ministry.

PostReg closely monitors the Swiss postal market and ensures that universal services are provided efficiently, in high quality and at prices affordable to all.

It also deals with complaints made by the public relating to universal services and ensures a fair and functioning competition in the opening postal market, for example the monitoring of compliance with standard sector working conditions or the ban on cross subsidies.

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