Belgian private postal service PPP is suing its rival Belgian Post Group (Bpost) and the Belgian Government.
The move comes after PPP had a major newspaper distribution contract cancelled following the Government’s decision to ditch the concept altogether, making it seem to many that the idea was designed to benefit Bpost from the start.
Bpost and the Belgian Government were summonsed to appear before the Commercial Tribunal, or business court, on January 17.
During the hearing to introduce the legal action, several publishers voluntarily intervened to argue a six-month “transition period” was necessary. Some further claimed that was not long enough, saying they feared “insurmountable losses” if the original distribution deal was shelved.
The initial hearing was held to provide lawyers representing the different parties the chance to arrange an agenda that would enable them to share their arguments. Oral presentations to the court are scheduled for April.
Despite PPP winning the original deal, the Government then reformed the entire system in December last year, making sure Bpost would continue to receive €75 million in State funding for a “transition period” of six months.
PPP CEO Michel d’Alessandro accused the Belgian Government of having “used all the tricks in the book” to thwart his company from ultimately implementing the contract – and gaining the associated subsidies.
A six-month transition period was included in the previous concession system to allow for a smooth organisational transition between distributors. PPP contends that is no longer relevant.
“There is no transition because there isn’t a new concession,” d’Alessandro said. The Government has mandated that publishers individually negotiate the best commercial terms with press distributors of their choosing, effective July 20, 2024.
The daily financial penalty of €494,000 that PPP wants to see imposed should it succeed in court was chosen on the basis of subsidies granted to Bpost – €75 million divided by the number of distribution days between January 1 and June 30, 2024.
Bpost declined to comment on the issue.
For its part, the Government’s FPS Economy department, which had given a favourable opinion of PPP to the Government under the tender process for the newspaper contract, said it was “at the disposal of the court”.
Centre-right N-VA parliamentarian Michael Freilich, who is critical of the Government’s relations with Bpost, said he “wasn’t surprised” about what was happening with what he called this “shady deal”.
He said he had previously brought the issue to the attention of Pierre-Yves Dermagne, Belgium’s Deputy Prime Minister and the Minister for the Economy and Labour.
“I have warned Minister Dermagne about this. The PS [Socialist Party] cheated the game by wanting to favour Bpost again,” he claimed.
The Bpost State subsidies have been a hotly discussed item for years in Belgian politics.
Last summer, investigative journalists accused the Government of sending hundreds of millions of euros to Bpost in what it alleged were “illegal subsidies”.
Kathleen Van Beveren, chief executive of E-logistics Eurasia at Belgian postal giant Bpost and a member of its executive committee, is stepping down from her role amid accusations of fraud and foul play inside the company. https://t.co/ZXbRl8PH5f
— Brussels Signal (@brusselssignal) August 9, 2023