* Authorities investigating French parcel delivery business
* Could be fined 10 pct of turnover -analysts
* Probe is part of wider industry investigation
* French operations of FedEX and TNT Express also contacted
By Neil Maidment
LONDON, July 16 Britain's Royal Mail has
received notice from French competition authorities over a
possible breach of antitrust law by one of its subsidiaries,
which could result in a fine for the recently privatised group.
Royal Mail said on Wednesday that it had received a notice
regarding an issue with the French arm of its GLS business, one
of Europe's largest ground-based parcel delivery services.
"We are currently considering the notice received from the
French regulator," it said. "Given the early stage of this
matter, we cannot yet determine the amount or range of potential
loss; however, it is possible that it could be material."
The company did not provide further specific details but
said the matter was part of broader competition investigations
in France. The French regulator declined to comment.
Royal Mail shares were down 1.8 percent at 480 pence in
Both FedEX Corp, the world's No.2 parcel delivery
group, and Dutch logistics company TNT Express have
also released similar notice statements about their businesses
FedEx said that French authorities were investigating
anticompetitive behaviour that is alleged to have occurred
"primarily during trade association meetings" involving general
managers of Tatex, which became FedEx Express France after the
American company bought the business in July 2012.
TNT Express said it had cooperated with the investigation
since it started in 2010.
Analysts at Espirito Santo said any fine would be relatively
insignificant for Royal Mail but would represent worse news for
"French antitrust law permits a maximum fine of 10 percent
of worldwide turnover," Espirito analysts said in a note.
"This would lead to a worst-case scenario of around a 160
million pound ($274 million) fine for Royal Mail (10 percent of
GLS revenue) and about a 670 million euro ($908 million) fine
for TNT Express (group revenue of 6.7 billion euros).
GLS contributed about 17 percent of Royal Mail's 9.45
billion pound revenue for the year to March 30.
The GLS network covers 37 countries but its main markets are
Germany, Italy and France, which account for 70 percent of
Royal Mail is in the middle of a turnaround programme in
France, where its business made an operating loss of 27 million
euros in its previous financial year. The group has exited its
overnight courier service and is focusing on two to three-day
parcel deliveries rather than an express service.
($1 = 0.5836 British Pounds)
($1 = 0.7380 Euros)
(Additional reporting by Kate Holton in London and Natalie Huet
in Paris; Editing by David Goodman)