Royal Mail yesterday announced it might face a significant fine, as its European parcel delivery subsidiary General Logistics Systems (GLS) is being targeted by the French competition authority as part of a widespread antitrust investigation.
Other parcel delivery companies, including FedEx, TNT Express, Deutsche Post’s DHL Express France SAS service and La Poste’s Exapaq and Chronopost subsidiaries also are being investigated as part of the probe into the industry, which TNT stated it had been co-operating with since 2010.
French antitrust law allows a fine of up to 10 per cent of a company’s world turnover, which would amount to up to £160m for Royal Mail’s GLS subsidiary. However, even this would equate to only three per cent of Royal Mail Group’s total market cap, according to analysts at Espirito Santo.
GLS, which was founded in 1999 and is based in Amsterdam, covers 37 countries in Europe, with the majority of its sales in France, Germany and Italy. It had revenues of £1.65bn in the year to 30 March, contributing over 17 per cent of total revenues of £9.45bn for Royal Mail Group.
GLS France, however, made an operating loss of €27m (£21m) last year.
Royal Mail shares closed down 1.88 per cent at 479.5p.