Letter Postage Hike at the Turn of the Year: The Monopoly Commission Says “No”

TVS News AI, editorially supervised, presents Letter Postage Hike at the Turn of the Year: The Monopoly Commission Says “No”.

The price of a standard domestic letter is set to become 20 cents more expensive at the turn of the year, bringing it to €1.15. The Federal Network Agency had generally approved an increase of around one-fifth for Deutsche Post — according to reports, the sharpest price rise to date.

The decision therefore affects a market dominated by Deutsche Post by a wide margin. The planned increase has also not yet been finally approved: approval of the letter postage rates applicable for 2027 and 2028 is still pending. The Monopoly Commission is already opposing the planned increase.

Why Duso considers the increase too high

The main criticism concerns the cost review

Tomaso Duso, chairman of the federal government’s advisory council and a professor of business economics, does not see the cause of the problem solely in the desired price increase. The Federal Network Agency recognizes too many Deutsche Post costs as so-called burdens. “The Federal Network Agency recognizes too many Deutsche Post costs as so-called burdens — the result is an excessively high postage rate,” he explained.

His criticism is therefore directed at the regulatory review process. The more of these costs are allowed to be factored into the calculation of letter postage, the higher the approved price becomes. According to the Monopoly Commission, the agency should therefore strike certain burdens from the calculation. “It should be ensured that customers only bear necessary burdens,” Duso said.

Competition is the second point of contention

According to the Monopoly Commission, Deutsche Post could use this mechanism to finance other business divisions at the expense of competitors. That would be particularly problematic because Deutsche Post dominates the letter market by a wide margin and its smaller competitors are in a considerably weaker position there. In the parcel segment, DHL — which also belongs to Deutsche Post — does not have such a large lead, according to the available information.

The Monopoly Commission thus sees a conflict between a higher letter price and the competitive situation. Duso is not calling for all approved costs to be removed. He recommends that the Federal Network Agency review the recognized burdens more strictly and allow only necessary costs to be factored into the postage calculation.

How the letter price depends on the recognized burdens

Deutsche Post cannot set the price itself

Deutsche Post cannot independently raise its letter postage rates. The planned increase requires approval from the Federal Network Agency. The regulatory process is therefore decisive: a stricter review of the recognized burdens would directly affect the approved letter price.

When calculating the postage rate, the postal service may include certain costs known in the industry as “burdens.” The more of these are recognized, the higher the calculated price becomes. According to the Monopoly Commission’s criticism, at least some of these items should be eliminated. The postage rate approved by the Federal Network Agency would then be lower.

From €0.95 to €1.15

Deutsche Post plans to increase the price of a standard domestic letter by 20 cents to €1.15 at the turn of the year. In addition to standard letters, postage rates for postcards as well as compact, large and maxi letters are also set to rise significantly. The report does not specify individual cent amounts for these other shipment categories.

The Federal Network Agency’s approval applies to the postage rates valid for 2027 and 2028. Final approval was still pending at the time of reporting. The scale of the planned increase is therefore clear, but the exact price is not.

Why the letter market is particularly vulnerable to the cost review

Fewer letters spread the same costs across fewer shipments

The volume of letters is falling sharply as people and businesses increasingly rely on digital communication by email or chat message. As a result, costs for staff, infrastructure and energy are spread across fewer shipments. This raises the so-called unit costs — that is, the costs of transporting and delivering an individual letter.

This is precisely where the Monopoly Commission intervenes. If the Federal Network Agency recognizes costs as burdens that are not essential to maintaining the network, the burden is shifted to the letter price. In the commission’s view, customers would then pay more than is necessary to cover the required burdens.

Duso also emphasizes that a stricter review would not endanger postal services in rural areas. His counterargument to the planned increase is therefore not that higher letter postage rates are unacceptable in principle. He wants the cost base to be cleaned up so that the postage rate is lower and Deutsche Post’s other business divisions are not financed at the expense of its letter customers.

The political objection before the final decision

The Monopoly Commission is making its move before approval

The sequence is remarkable: the Federal Network Agency has generally allowed an increase of around one-fifth, Deutsche Post is planning the concrete increase, and final approval for 2027 and 2028 is still pending. The stricter review of the burdens demanded by Duso can therefore still influence the final decision.

The strongest objection to his position would be that recognizing too few costs could make ongoing letter services more expensive. Duso’s response is his statement that a stricter review would not endanger services in rural areas. Whether the Federal Network Agency adopts his recommendation and what the final postage rate will actually be will be decided for the years 2027 and 2028.

The critical assessment comes from a report by Handelsblatt. The headline of RTÉ News also highlights the Monopoly Commission’s sharp criticism.