Royal Mail avoids larger French fine as cartel probe climaxes

The fine was almost exactly as expected and is covered by provisions already made in the company's financial statement for last year, when £46m was set aside, comprising £40m for the anticipated fine and £6m for costs.

Royal Mail said it accepted the Autorité de la Concurrence's ruling that GLS France, an arm of its parcel division, was part of a price-fixing cartel between 2004 and 2010.

The French competition authority, which was alerted to the price rigging via whistleblower Deutsche Bahn in late 2008, regulators said 20 companies and an industry group co-ordinated annual rate hikes during the period, with 15 of the companies also colluding on a fuel surcharges from 2004 to 2006.

"Royal Mail recognises the absolute need to comply with European and national competition law and the necessity to prevent infringements. It has implemented an enhanced compliance programme in GLS France in order to strengthen the culture of competition law compliance."

The company originally set aside £18m but increased its provision after discussions with the French authorities.

Geodis SA, owned by French railway company SNCF, was hit with the largest penalty, of €196.1m, while La Poste SA’s Chronopost was fined €99.2m, DHL’s French unit €81.2m, TNT €58.5m and FedEx €17m.

UK regulator Ofcom is also investigating Royal Mail and has already provisionally accused the company of breaching competition law in the way it dealt with door-to-door letter delivery rivals.

Shares in Royal Mail were up 1.44% to 444p by 0930 GMT on Tuesday, breaking a four-day losing streak.