Is Swiss Post building a new monopoly?
Swiss Post, two of its subsidiaries, and private distribution companies are planning to launch a new company for unaddressed direct mail
Swiss Post, two Swiss Post subsidiaries and private distributors are planning a new company for unaddressed advertising mailingsBy Markus KnöpfliThree big players distribute unaddressed advertising in Switzerland: Swiss Post, Swiss Mail and the Swiss Post subsidiaries Direct Mail Company and Epsilon. But the three big players could soon be reduced to two: Swiss Post and a new company in which Swiss Post holds a stake.
It makes a difference whether you commission Swiss Post, its 50 percent subsidiary Direct Mail Company (DMC) or Swiss Mail (SM), an association of 16 distribution organizations, to distribute unaddressed advertising. This is because an WerbeWoche comparison six weeks ago (WW 39/00) showed: The differences in quality, price, time required and print run are considerable.
Perhaps not for long. Swiss Post, DMC, SM and Epsilon, a 66%-owned Swiss Post subsidiary in French-speaking Switzerland, are holding cooperation talks. According to information available to WerbeWoche, the following model is under discussion: in future, there will only be one other nationwide sales organization for unaddressed advertising in addition to Swiss Post. This will be a newly founded company in which, in addition to Swiss Post, DMC and Epsilon, the 16 SM partners and possibly other interested parties will also be involved. The new company will have quasi-supremacy over the entire distribution network and will issue territorial licenses to participating contractors.
A piquant fact: Swiss Post apparently wants to acquire at least 45 percent of the new company, partly directly and partly via its subsidiaries Epsilon and DMC.
The egg that Swiss Post wants to hatch has not yet been laid
What is certain is that the four partners have already "submitted a cooperation agreement in this matter to the Competition Commission (ComCo) for examination", as ComCo Director Rolf Dähler said on request. The Competition Commission is now investigating whether the new model gives "indications of restrictions of competition".
Those willing to cooperate are tight-lipped. The managing directors of DMC and Epsilon could not be reached. And Swiss Post spokesman Hubert Staffelbach is unwilling to confirm or deny: "I cannot comment on your questions."
However, there are attempts at denial on the part of SM President Peter Wüthrich. The managing director of Anzeiger Luzern speaks of "indiscretions that are untrue and unsubstantiated". Various SM members also say "no comment". But some refer to René Bill, Managing Director of SM member AWZ Bern, who is the only person to provide information "on this matter". Bill also puts things into perspective. DMC, Epsilon and SM have been dividing up areas with low litter density among themselves for three years for cost reasons. This fall, too, there have been such "area consolidations". "Everything else is simply speculation," says Bill. He admits that negotiations on further cooperation are underway, as well as the fact that a cooperation agreement is being examined by the Competition Commission. "But we are negotiating in various directions, nothing finalized is on the table yet," he says.
There is a reason for the desire to cooperate: in recent years, a net sum of around three billion francs has been spent on direct advertising, not much for three large and numerous local companies. The very high proportion of stop stickers in many places makes the situation more difficult, and distributors are also rare at present. Above all, however, fuel prices and HVF are driving up costs. Various SM members are therefore under pressure, and DMC is also operating at a loss in some places.
It makes a difference whether you commission Swiss Post, its 50 percent subsidiary Direct Mail Company (DMC) or Swiss Mail (SM), an association of 16 distribution organizations, to distribute unaddressed advertising. This is because an WerbeWoche comparison six weeks ago (WW 39/00) showed: The differences in quality, price, time required and print run are considerable.
Perhaps not for long. Swiss Post, DMC, SM and Epsilon, a 66%-owned Swiss Post subsidiary in French-speaking Switzerland, are holding cooperation talks. According to information available to WerbeWoche, the following model is under discussion: in future, there will only be one other nationwide sales organization for unaddressed advertising in addition to Swiss Post. This will be a newly founded company in which, in addition to Swiss Post, DMC and Epsilon, the 16 SM partners and possibly other interested parties will also be involved. The new company will have quasi-supremacy over the entire distribution network and will issue territorial licenses to participating contractors.
A piquant fact: Swiss Post apparently wants to acquire at least 45 percent of the new company, partly directly and partly via its subsidiaries Epsilon and DMC.
The egg that Swiss Post wants to hatch has not yet been laid
What is certain is that the four partners have already "submitted a cooperation agreement in this matter to the Competition Commission (ComCo) for examination", as ComCo Director Rolf Dähler said on request. The Competition Commission is now investigating whether the new model gives "indications of restrictions of competition".
Those willing to cooperate are tight-lipped. The managing directors of DMC and Epsilon could not be reached. And Swiss Post spokesman Hubert Staffelbach is unwilling to confirm or deny: "I cannot comment on your questions."
However, there are attempts at denial on the part of SM President Peter Wüthrich. The managing director of Anzeiger Luzern speaks of "indiscretions that are untrue and unsubstantiated". Various SM members also say "no comment". But some refer to René Bill, Managing Director of SM member AWZ Bern, who is the only person to provide information "on this matter". Bill also puts things into perspective. DMC, Epsilon and SM have been dividing up areas with low litter density among themselves for three years for cost reasons. This fall, too, there have been such "area consolidations". "Everything else is simply speculation," says Bill. He admits that negotiations on further cooperation are underway, as well as the fact that a cooperation agreement is being examined by the Competition Commission. "But we are negotiating in various directions, nothing finalized is on the table yet," he says.
There is a reason for the desire to cooperate: in recent years, a net sum of around three billion francs has been spent on direct advertising, not much for three large and numerous local companies. The very high proportion of stop stickers in many places makes the situation more difficult, and distributors are also rare at present. Above all, however, fuel prices and HVF are driving up costs. Various SM members are therefore under pressure, and DMC is also operating at a loss in some places.
