160

Business

Postal service accused of misusing state subsidy

admin
November 26th, 2013


This article is more than 11 years old.

Delivery firms allege Post Danmark is using taxpayer funds to hold prices of advertisement delivery business artificially low

Privately-owned advertisement distribution firms are accusing Post Danmark of using its state subsidies for postal distribution in order to finance its own advertisement distribution operations, financial daily Børsen reports. The allegations came about as the postal service announced plans to hike the price of postage for a standard letter to 9 kroner, yet charges less than 1 krone for an advertisement weighing the same.

While not ruling out the possibility that Post Denmark was more efficient than they were, the privately owned firms argued it was unlikely the state-owned monopoly's cost were lower. 

Post Danmark defended the lower price, saying letter carriers needed to make deliveries to homes anyway, and that the cost of delivering the advertisement reflected the additional cost of logistics.

Falling volume undermines model
Morten O Nielsen, the head of Post Danmark, also pointed to a Supreme Court ruling approving the postal service's price structure. Postage volumes, however, are down 60 percent since 2000, with fewer homes receiving post each day, and distribution firms say that means the argument no longer applies. 

They also pointed out that the postal service’s income from advertising distribution had risen in proportion to overall income, and said that was an inidication it was using its postal operations to subsidise its profit-making advertising delivery business.

Martin Nyvang, of Konkurrence- og Forbrugerstyrelsen, the competition authority, said it had received four formal complaints against Post Danmark and that it was “highly conscious” of the situation. 


Share

Most popular

Subscribe to our newsletter

Sign up to receive The Daily Post

















Latest Podcast

A survey carried out by Megafon for TV2 has found that 71 percent of parents have handed over children to daycare in spite of them being sick.

Moreover, 21 percent of those surveyed admitted to medicating their kids with paracetamol, such as Panodil, before sending them to school.

The FOLA parents’ organisation is shocked by the findings.

“I think it is absolutely crazy. It simply cannot be that a child goes to school sick and plays with lots of other children. Then we are faced with the fact that they will infect the whole institution,” said FOLA chair Signe Nielsen.

Pill pushers
At the Børnehuset daycare institution in Silkeborg a meeting was called where parents were implored not to bring their sick children to school.

At Børnehuset there are fears that parents prefer to pack their kids off with a pill without informing teachers.

“We occasionally have children who that they have had a pill for breakfast,” said headteacher Susanne Bødker. “You might think that it is a Panodil more than a vitamin pill, if it is a child who has just been sick, for example.”

Parents sick and tired
Parents, when confronted, often cite pressure at work as a reason for not being able to stay at home with their children.

Many declare that they simply cannot take another day off, as they are afraid of being fired.

Allan Randrup Thomsen, a professor of virology at KU, has heavily criticised the parents’ actions, describing the current situation as a “vicious circle”.

“It promotes the spread of viruses, and it adds momentum to a cycle where parents are pressured by high levels of sick-leave. If they then choose to send the children to daycare while they are still recovering, they keep the epidemic going in daycares, and this in turn puts a greater burden on the parents.”