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    Private-owned postal operators and the rules of law

     Warsaw, 22nd March 2011


    Private-owned postal operators and the rules of law


    The Polish postal market looks forward to the year 2013, when its full liberalisation will take place. However, it does not imply that postal operators, especially those which are private-owned, passively await for a change. The year 2010 proved that independent postal operators became serious competitors to the Polish national monopolist, Poczta Polska, and that their activities have significant impact on the market's shape. Postal operators need not only struggle to gain the market share but also standardisation of the law and providing an equal access to clients for all the operators.


    Because of the market's size, the functioning of independent postal operators draws a lot of attention. Its estimated value is now 7 billion PLN. Moreover, relatively high profitability and high demand from the clients, who are expecting the breakthrough on the market, make postal services an even more attractive business. It is estimated that about 1.5 billion letters run through the Polish postal market. Until 2013, the service of sending letters which weight no more than 50 grams is reserved solely to Poczta Polska, and sum up to 75% of the whole market, creating almost a half of its total revenue. In 2009, the share of Poczta Polska in sending the letters of the lowest weight category amounted to 99.96% and gained 99.94% of total revenue. Both domestically and abroad, the year 2009 brought realisation of 3.2 billion postal services (correspondence, marketing materials, parcels, door drops).


    "In order to keep the market position until the full market liberalisation, private-owned postal operators need to modify their products and services. The inconvenience concerning the distribution of letters which weight no more than 50 grams is followed by vague rules of the Polish Postal Law, which reinforce the monopolist's position and discriminate privately-owned companies", said Jacek Adamski, the Director of the Economic Department of the Polish Confederation of Private Employers Lewiatan.


    Among the companies that striving to change status quo on the market there are the Polish Confederation of Private Employers Lewiatan, The Polish Association of Independent Postal Operators and InPost, the largest independent postal operator in Poland.


    "I have been pursuing the policy aiming at equalising the playing field for Poczta Polska, the Polish state-owned monopolist, and private-run postal operators. I am happy to find that increasingly more significant institutions supports us in our efforts, and the demands that the regulations should be changed are a driving force behind the activities of more and more companies. Despite numerous impediments having their source in the Polish postal law, InPost has been consistently gaining ground outside of the area which has been reserved for the state-owned operator by offering lower prices and better services. We pride ourselves on flexibility and adaptability to the clients' needs, which is also a factor in our being successful. We now hold 10% of the market, but we plan to increase this share to 18-20% by the end of 2012", said Rafal Brzoska, the Chair of InPost.


    The Polish Association of Independent Postal Operators with the support of the Polish Confederation of Private Employers Lewiatan and InPost call for many legal changes which would make it possible for the postal sector in Poland to develop consistently. The most important questions in need of regulation are:


    • speeding up the process of legislation of the new postal law: the Cabinet accepted the assumptions for the bill on the Polish postal law submitted by the Minister of Social Equipment on 5th October 2010. Despite the fact that six months have passed from the moment when the Cabinet accepted the assumptions, the further course of actions with the project is not known. The bill has not been included in schedule of legislation of the Cabinet for the year 2011. In such a situation the works on the bill need to be postponed until the next year, which puts into jeopardy the implementation of the 2008/WE directive on 31st December 2012.
    • the amendment of the article 45 of the Polish Act on Postal Services: the article 45 states that only the proof of mailing issued in an office of the state-owned operator is a public document. The turnover on this field is weighty and concerns such institutions as the courts of law, prosecutor's offices, the police, the inland revenue, debt collection agencies and their customers. Approximately 150-200 million letters and parcels are sent in this area yearly. Sustaining the regulation in the unchanged form strengthens the position of the monopolist and lessens the possibilities for private-run operators.
    • VAT standardisation for the whole postal market: from the beginning of 2010, Poczta Polska S.A., taking advantage of the incompatibility of the Polish law with the EU legislation, has been providing preferential service for some of its clients based on subjective VAT exemption. What is particularly controversial in this context are Agglomeration Letters. Both Poczta Polska and institutions it services within the Agglomeration Letter scheme are exempt from VAT. After the service was introduced by Poczta Polska, independent postal operators began losing clients and noticed a decrease in the number of letters and parcels delivered (app. 3% in January and February 2010). This happened because Poczta Polska exempts from VAT on a subjective basis within the Agglomeration Letters service.
    • the amendment of the regulations concerning postal money orders: the money order service is not a service reserved for a state-owned operator. Nonetheless, because of the definition of a money order left in the regulations by omission result in the groundless creation of the monopoly of Poczta Polska. A sole-source contract by the Polish Social Insurance Company with Poczta Polska S.A. is an example of such actions.

    "What is the aim of our organisation is prompt reaction and pointing out the regulations which harm free market competition. We hope that the more institutions join our initiative, the quicker we will succeed in amending the regulations. I would like to highlight that we do not do this for the benefit of private companies, but also us all, the clients. I believe that honest regulations will allow the verification of the service quality and the standards of particular operators. The state-owned operator, which should have used the last two years to improve its standards, has squandered this time by constantly impeding the functioning of independent operators. We hope that our actions and demands will curb such practices", said Wieslaw Klimaszewski, the Chair of the Polish Association of Independent Postal Operators.


    Independent postal operators are intent on developing their business activity in Poland, thus, increasing the competitiveness of the market and creating new jobs. The support of state institutions is necessary in order reach an equal rules of functioning and competition among the companies active in the postal sector.