Royal Mail facing fine of up to £160M as subsidiary investigated by French competition authorities
The French arm of its GLS business is one of Europe’s largest ground-based parcel delivery services
Wednesday 16 July 2014
Royal Mail was today facing a fine of up to £160 million after its parcels operation in France was caught up in a French competition probe.
The delivery giant revealed it had received a notice from the French competition authority — Autorité de la Concurrence — regarding an alleged breach by the French arm of its GLS business, one of Europe’s largest ground-based parcel delivery services.
GLS contributed about 17 per cent of Royal Mail’s £9.45 billion revenue for the year to March 30. The network covers 37 countries but its main markets are Germany, Italy and France. “We are currently considering the notice received from the French regulator,” it said. “Given the early stage of this matter, we cannot yet determine the amount or range of potential loss; however, it is possible that it could be material.”
Both FedEX and TNT Express have also been named in the investigation, the latter admitting it has been co-operating with French authorities since the probe began in 2010.
A spokesman for Royal Mail would not comment on how long the company has been aware of the investigation but said details were not included in the prospectus for its controversial stock market flotation last year. Analysts at Espirito Santo said any fine would be relatively insignificant for Royal Mail but would represent worse news for TNT Express.
“French antitrust law permits a maximum fine of 10 per cent of worldwide turnover. This would lead to a worst-case scenario of around a £160 million fine for Royal Mail (10 per cent of GLS revenue) and about a €670 million (£529.5 million) fine for TNT Express (group revenue of €6.7 billion).” Shares in the company fell 5.1p to 483.6p today following news of the probe.
Last week, a committee of MPs said taxpayers may have lost out on about £1 billion from its flotation. Royal Mail shares were priced at 330p, but jumped as high as 618p shortly after.
The Business, Innovation and Skills Committee criticised Mr Cable and his department for relying too much on its City adviser, Lazard, which it said gave poor guidance to the Government and was too focused on getting the share sale done and not enough on gaining maximum value for the taxpayer.
Adrian Bailey, the Labour MP who chairs the committee said: “The Government cannot blithely dismiss as ‘froth’ our committee’s concern that the low issue price of this prime public asset has cost the taxpayer around a billion pounds.”
- 1 PlayStation and Xbox hacked by Lizard Squad
- 2 Christmas comes early to Hong Kong, as millions of bank notes spill out onto busy street
- 3 The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
PlayStation and Xbox hacked by Lizard Squad
Antonio Martin shooting: Black teenager may have tried to ambush patrolman, says police officer's lawyer
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
Boxing Day snowfall set to push even more bargain-hunters online for sales
The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...