Authorities suspect Finland's three largest wood buyers of price-fixing

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The Finnish Competition Authority (FCA) are suspecting the country's three largest wood-buyers, Metsäliitto, Stora Enso, and UPM, of having taken part in illegal price-fixing, the purpose of which was to reduce their mutual competition in wood procurement.
      According to the FCA suspicions, the paper and pulp manufacturers practiced price cooperation between 1997 and 2004. When the buyers regulated their competition, the forest owners were forced to settle for selling wood at a cheaper rate than what would have been the case in a genuine open market situation.
     
The FCA started their investigation in the spring of 2004, when UPM alerted the officials of their own suspicions, hoping to be granted immunity from possible disciplinary measures under Article 9 of the Competition Act.
      After two years, the officials have finally concluded their investigations, and Metsäliitto, UPM, and Stora Enso have been provided with copies of the FCA report for comment.
      The firms suspected of price-fixing have until May 15th to respond to the FCA claims.
      Depending on their responses, the FCA will then decide whether to take the case into the Market Court.
      A conviction in the Market Court could lead to fines of up to ten percent of the companies' net sales.
     
The FCA refrained from revealing any further details of its suspicions on Wednesday. Apparently, the price-fixing cartel suspicions cover the entire country and all varieties of wood and lumber.
      Between the three of them, the suspected companies are responsible for purchasing two thirds of all sawn timber and 100% of all pulpwood in Finland.
      This is not the first time the three forestry companies are suspected of price-fixing. Five years ago, the Supreme Administrative Court found Metsäliitto, UPM, and Stora Enso guilty of unlawful price cooperation in the Mikkeli region, imposing a fine of half a million euros on each of the firms.
      At that time, the FCA was critical that the fines given were far too low, making price cooperation a profitable business even when caught.


Previously in HS International Edition:
  Paper manufacturer UPM cutting thousands of jobs in Finland (9.3.2006)

Links:
  Finnish Competition Authority press release

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