FOR Analysis 9/2017: Polish Post Office the grip of the state tightens - so - the economy and interests of the taxpayer pushed into the background
- Following the partial opening of the postal market in January 2013, the monopoly position of Poczta Polska (Polish Post Office) is now being restored and competition in the letter mail market is being restrained. At the same time, the trend of positive but slow changes in the activity of Poczta Polska is being reversed. Competition made Poczta Polska increase the quality of services, which was visible even in the increase in the percentage of complaints resolved positively in 2013-2015.
- The main purpose of the amendments to the Postal Law presented by the Ministry of Infrastructure and Construction in February this year is to grant the designated operator an exclusive right to deliver judicial and administrative mail. Thus, Poczta Polska, as the designated operator until the end of 2025, will not be subject to market competition pressure in this area. Because of this amendment, the costs borne by courts and offices are expected to increase by almost PLN 1000 million by 2019, according to the proponent of the amendment.
- According to conservative estimates, in 2019, 39% of the revenues from the letter mail market will come from the Polish Courts’ and Administrative Courts' registered mail. Since the mail letter market is declining, it may mean that the last chance to develop competition on the market is lost. In such a situation, the pressure on prices to fall (or limit their increase) in the area of other services provided by the Polish Post Office will be weakened. Recently the local authorities have learned it firsthand - many of them did not receive any offers but from Poczta Polska and the state operator was able to set prices up to 87% higher than before.
- In April this year, Deputy Minister of Infrastructure and Construction confirmed that the Polish Post - contrary to plans several years ago - would not enter the stock exchange and remain 100% owned by the State Treasury. Research shows that after privatization privatized mail operators in the Netherlands, Germany, Austria, and Belgium have begun to modernize their operation, seek new areas of business, reduce employment and increase profitability. Moreover, even the sale of a minority stake in Poczta Polska by the State Treasury and the stock market floatation would increase its transparency.
Full analysis by FOR (in Polish) aviliable here.
You are welcome to contact our expert:
Marcin Zieliński, Economist at Mises Institute
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