Metsäliitto did not participate in wood market price cartel

 

The Finnish Competition Authority considers that Metsäliitto has committed a serious violation of the restraint of competition, although the violation in question is slight.
Metsäliitto considers the fine proposed by the Finnish Competition Authority to be unreasonable. In a previous case the order of the Finnish Competition Authority was reduced from EUR 3.3. million to EUR 0.5 million as a result of court proceedings.
Sharing pricing information has not had any impact on the price of wood or the position of the forest owner.

The Finnish Competition Authority has brought to a close its investigation into the raw wood markets that was begun in 2004. The EU Competition Office had already terminated its investigations into magazine printing paper and fine paper that were based on a complaint issued by UPM-Kymmene, deeming the cause for complaint unfounded.

Regarding the last European section of the complaint, raw wood, the Finnish Competition Authority deems that during the period 1997-2004, forest industry companies have participated in actions that seriously violate competition legislation. The Finnish Competition Authority has proposed a EUR 21 million fine for Metsäliitto. However, this is only a proposal and in a previous, similar case, the fine of roughly EUR 3.3 million proposed by the Finnish Competition Authority shrunk to half a million euro in the court proceedings.

Since the start of the investigation, Metsäliitto has co-operated with the Finnish Competition Authority in order to clarify the issue, and has therefore received a 30% discount on the proposed fine. During the process, Metsäliitto has acknowledged that clerical personnel employed by Metsäliitto had engaged in activities constituting mild breaches of the competition legislation, in other words, sharing pricing information during the period 1997 – 2001.  At the same time, Metsäliitto denies having participated in pricing agreements or any similar type of cartel.

”In connection with the complaint, UPM-Kymmene has clearly exaggerated the point that prohibited pricing co-operation would have occurred in wood acquisition. Based on previous decisions of the EU Commission, it can be presumed that UPM has also acted in the same way in the complaints relating to magazine printing paper and fine paper and which the Commission already deemed baseless,” says Esa Kaikkonen, General Counsel for Metsäliitto Group.
 
Sharing pricing information had no impact on the wood markets or the price of wood during the Finnish Competition Authority’s review period. Current pricing information can easily be found on the Internet or from branch magazines, or by calling any forest company office and requesting an offer for wood. 

”It is our understanding that the parties have aimed solely at maintaining wood trading and ensuring raw material supply for the Finnish industry in a situation where also the wood seller has actively participated in steering the markets. In this situation, Metsäliitto’s role has been more that of an arbitrator, and Metsäliitto's actions have not caused any damage whatsoever to the forest owners," emphasises Kaikkonen, General Counsel for Metsäliitto Group.  

”We feel the Finnish Competition Authority has not been sufficiently objective in approaching the results of the investigation. In all reality, we didn’t get any opportunity to influence the proposal with our account of the events until two years after the investigation had begun.  When such a long time has passed, it becomes very difficult to change any conclusions that have already been reached. The investigation material contained only a limited amount of written data, which means word stands against word and the final conclusion of the matter is left to the Market Court to decide," summarises Kaikkonen.

The clerical personnel that have engaged in slight breaches of the legislation on restrictive trade practices have either transferred outside the group, or their assignments have been changed and they are no longer involved with wood trading. Metsäliitto has also instructed its personnel further in these issues, in order to avoid similar cases in the future.

After it has studied the final proposal issued by the Finnish Competition Authority, Metsäliitto will provide its response to the Market Court. 

Additional information:
Esa Kaikkonen, General Counsel, Metsäliitto Group, tel. +358 50 598 8746
Lauri Peltola, Group CCO, Metsäliitto Group, tel. +358 50 570 5606