Metsäliitto did not participate in wood market price cartel
Metsäliitto Group STOCK EXCHANGE RELEASE
21.12.2006 1:59:00 p.m.
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 minor.
Metsäliitto considers the sanction proposed by the Finnish Competition Authority
to be unreasonable. In a previous case the sanction proposed by 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
sanction for Metsäliitto. However, this is only a proposal and in a previous
case, the sanction 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 sanction. During the process, Metsäliitto
has acknowledged that its personnel had engaged in activities constituting minor
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 price fixing or any similar type of serious cartel.
"In connection with the complaint, UPM-Kymmene has clearly exaggerated the point
that prohibited price fixing 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 paper and fine paper
and which the Commission already deemed baseless," says Esa Kaikkonen, General
Counsel for Metsäliitto Group.
Sharing information concerning prices had no impact on the wood markets or the
price of wood during the Finnish Competition Authority's review period. Current
price data 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 a facilitator, 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
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 personnel that have engaged in minor 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
