The first round of wage talks at Deutsche Post failed to produce any results on Friday.

After the first round of negotiations in Fulda on Friday, Deutsche Post once again rejected the Verdi trade union's demand for wage increases of 15 percent. "Income increases of the magnitude demanded by Verdi (are) not justifiable," said a Post spokesperson. The company is now counting on progress being made in the next round of negotiations on January 18 and 19. The positions are still far apart, emphasized Verdi. "The employees urgently need compensation for inflation and they also expect a share in the company's success," emphasized Verdi's head of negotiations Andrea Kocsis. She expects a "negotiable wage offer".

The Verdi union is demanding a 15 percent wage increase for the approximately 160,000 employees of the Bonn-based group over a period of twelve months. Swiss Post had already rejected this as "unrealistic in the amount mentioned". If the parties fail to reach an agreement, there could soon be protests by employees: The peace obligation at the post office expired at the turn of the year. "Strikes are not ruled out from January 2023," Kocsis had already announced in a letter to Verdi members.

Swiss Post and Verdi last agreed on wage increases in September 2020. At the time, the 28-month agreement included a three percent increase in wages and salaries on January 1, 2021 and a further two percent increase on January 1, 2022.

Swiss Post has long been generating the lion's share of its profits outside of the traditional mail business in Germany. Overall, the Group is expecting a record operating profit (EBIT) of 8.4 billion euros for 2022, with the letter and parcel business in Germany contributing around 1.35 billion euros. In the letter mail business, the Group is struggling with falling mail volumes and shrinking income with rising energy costs. In addition, customer complaints have increased recently. However, the Bonn-based company will not be able to raise prices for the time being. This is because postage for standard letters, for example, currently stands at EUR 0.85 and has been set by the regulator, the Federal Network Agency, as planned until the end of 2024. The Group can therefore "not simply pass on cost increases to our customers". The average inflation rate in Germany last year was 7.9 percent, the highest it has been since the Federal Republic of Germany was founded.

(Report by Matthias Inverardi, edited by Jörn Poltz. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).