Norway Post to cut 440 jobs in Denmark

OSLO, Nov 4 (Reuters) - State-owned Norway Post said on Wednesday it will shut its business mail distribution operations in the Copenhagen region, dismissing about 440 workers.

"The financial crisis and unequal competition conditions have resulted in the company failing to become profitable in the space of three years," Norway Post said of its "Bring Citymail" distributor of industrial mail in the Danish capital.

"Negotiations are now being started to terminate the mail distribution operations and dismiss 440 employees," it said.

Norway Post said Bring Citymail Danmark, in which it has invested about 500 million Norwegian crowns ($86.85 million), paid 25 percent value added tax while its main competitor, Post Danmark, is exempt from paying VAT.

"We have to stop the losses and this is why we are terminating the mail distribution operations as from January 2010," Norway Post Group chief executive Dag Mejdell said.

The plans to shut Bring Citymail's operations in Denmark did not affect Norway Post's similar operations in Sweden.

"Although the Swedish market is also hard hit by the financial crisis Bring Citymail in Sweden does not have a VAT disadvantage compared to Sweden's Posten," it said.

Citymail distributes three days a week and reaches around 2.3 million households in Sweden and around 1 million in the Copenhagen area, according to the Norway Post website. ($1=5.757 Norwegian crowns) (Reporting by Wojciech Moskwa; Editing by Greg Mahlich)