German regulator paves way for Deutsche Post stamp price hik

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German regulator paves way for Deutsche Post stamp price hikes

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A German regulator has proposed to allow Deutsche Post to increase stamp prices in its home market over the next five years.

The German Federal Network Agency, in a preliminary decision published on its website on Monday, said the leeway for mark-ups would be based on annual inflation rate minus the rate of productivity increase.

It set the annual rate of productivity increase at 0.2 percent and invited competitors, consumer protection groups and interested parties to comment on this rate.

A final decision is expected before the end of the year.

Deutsche Post, the world's largest postal and logistics group, makes its profit mainly from its express courier services, forwarding and supply chain businesses.

The Mail unit has been hit by a decline in letter volumes, advertising expenditures among mail-order customers and subscriptions for newspapers and magazines.

Mail, which generated more than one-fourth of group revenues last year, managed to eke out a 2.9 percent increase in sales in the first-half of this year, profiting from growth in e-commerce.

Revenue growth was also driven by a 5.5 percent increase in the price of stamps for letters weighing up to 20 grams at the start of the year, the first increase in 15 years.

The Mail division posted a 5.1 percent decline in operating profit last year at 1.05 billion euros ($1.44 billion). ($1 = 0.7302 euros) (Reporting by Marilyn Gerlach; Editing by Ludwig Burger)