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Metsähallitus to initiate judicial proceedings in timber cartel case

(01.04.2011)

 

Metsähallitus to initiate judicial proceedings in timber cartel case

Published 31 March

Metsähallitus has filed a claim for damages with the Helsinki District Court and decided to initiate judicial proceedings against three forest companies which the Market Court had found guilty of prohibited price cooperation in the roundwood market. The proceedings are initiated now to prevent allegations of the claim being time-barred, even though these should be considered groundless.

Metsähallitus demands that Metsäliitto, Stora Enso and UPM-Kymmene jointly pay compensation for losses sustained by Metsähallitus. The maximum amount of compensation contained in the claim is 25% of the value of timber trade between Metsähallitus and the companies in 1997-2004, or approx. Eur 282.6 million (+ VAT and interest). The turnover of the trade between Metsähallitus and the three companies during the period in question exceeded Eur 1.1 billion.

In addition to its own reports, Metsähallitus can provide statements from independent experts to quantify its losses. In competition economics, losses caused by cartels have been found to be in the range of 30%, says Ms Susanna Oikarinen, General Counsel of Metsähallitus. 

According to Ms Oikarinen, case law on compensation for losses caused by a cartel is very limited in Finland, and the timber and asphalt cartel rulings will be precedents.

Metsähallitus will specify its claims at a later date.

In its ruling of 3 December 2009, the Market Court found that the forest companies in question had been guilty of prohibited price cooperation in the period between 1997 and early 2004. The cartel was national in scope and it covered 100% of the pulp wood market and 80% of the general roundwood market.
The Market Court ruling states that representatives of these companies had for example exchanged information about the status and contents of negotiations of individual companies. The Market Court found that the cooperation targeting Metsähallitus between the forest companies was a manifestation of activities violating the Act on Competition Restrictions.

On 25 January 2011, Metsähallitus decided to claim compensation from the companies guilty of pricing cooperation, after which the companies were invited to negotiate. Metsähallitus continues to be willing to negotiate with the companies in order to reach an agreement in the matter.

Metsähallitus is a state enterprise that provides natural resource services and manages a total of 12.5 million ha of state-owned water and land areas. Metsähallitus engages in business operations and has public administration duties. Its operations are based on productive overall management of state land, and its customers include both private individuals and major companies. In 2010, Metsähallitus produced a turnover of Eur 367 million.

For more information please contact: Mr. Juha Mäkinen, Director of Communications, tel. +358 (0)40 570 9307



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Source: http://www.metsa.fi