UPDATE 2-Minimum wage plan scuppers Deutsche Post rivals

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By Nicola Leske

FRANKFURT, Dec 4 (Reuters) - German government plans for a minimum wage in the postal sector have made rivals rethink their challenges to Deutsche Post (DPWGn.DE: Quote, Profile, Research, Stock Buzz) when its monopoly on domestic letters drops away next year.

One of Deutsche Post's main rivals, mail delivery company PIN Group, said on Tuesday it will have to cut more than 1,000 of its 9,000 jobs in Germany due to Berlin's plans to put a floor under wages in the sector.

The government last week agreed to set minimum pay rates of up to 9.80 euros ($14.45) per hour, depending on an employee's level of responsibility. The law will apply from Jan 1, 2008.

The sum is far more than competitors to former state monopoly Deutsche Post now pay their staff.

Contrary to other European countries, Germany does not have a nationwide minimum wage. Instead, the government can set minimum wages for individual industry sectors.

German Chancellor Angela Merkel opposes a blanket minimum wage, reasoning that a statutory minimum wage would create new problems and could put jobs at risk.

So far, only builders, electricians and industrial cleaners are covered by a statutory minimum wage.