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German regulator holds off approving any hike in letter postage

German regulator holds off approving any hike in letter postage
FILE PHOTO: A postman of German mail services Deutsche Post AG delivers mail in Hanau, Germany, June 2, 2018. REUTERS/Kai Pfaffenbach/File Photo   -   Copyright  Kai Pfaffenbach(Reuters)
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BERLIN/DUESSELDORF (Reuters) – A German regulator said it was putting off a decision on any increases in the postage price of letters in Germany until at least early next year, which means Deutsche Post DHL <DPWGn.DE> cannot currently ask for approval to charge its customers more.

Shares in Deutsche Post fell as much as 5.3 percent to a two-year low at 27.04 euros after the news, underperforming a 1.3 percent rise by Germany’s DAX index <.GDAXI>.

“We have to take this step because Deutsche Post has not provided sufficient evidence of changes to its costs and savings as a consequence of restructuring,” Federal Networks Agency President Jochen Homann said in a statement on Wednesday.

The regulator said current postage levels would remain in effect until new ones were approved, which would likely happen in the first half of 2019. A spokesman for the agency said that a decline in prices was not expected.

A spokesman for Deutsche Post said the company hoped to receive a decision on postage for letters before the European spring.

German weekly Bild am Sonntag had reported in May that Deutsche Post planned to raise letter postage to 0.80 euros from 0.70 euros from 2019. That would be the first increase since early 2016, when Deutsche Post raised postage from 0.62 euros.

Under German law, the Federal Networks Agency decides by how much postage can be raised. Postal companies then decide which prices to adjust and ask the regulator for approval.

Deutsche Post in June announced plans to restructure its post and parcel delivery division to better cope with rising staff and transport costs.

(Reporting by Maria Sheahan and Matthias Inverardi; Writing by Tom Sims; Editing by Emelia Sithole-Matarise)

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