Metsähallitus seeks €159.4M in compensation from Stora Enso, Metsäliitto, UPM for losses it sustained as a result of timber market cartel

HELSINKI , December 13, 2011 (press release) – A complemented claim was brought by Metsähallitus on 12 Dec 2011 to the Helsinki District Court in the timber cartel case. Metsähallitus is claiming compensation from Stora Enso, Metsäliitto and UPM-Kymmene for losses it sustained as a result of the timber market cartel. Based on third-party reports, Metsähallitus seeks from the companies compensation amounting to EUR 159.4 million, together with interest and primarily with joint liability, for the losses sustained by it as a consequence of the cartel.

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. According to reports, Metsähallitus also suffered from the impacts of the cartel in its timber trade in 2005.

The Market Court ruling states that, in violation of the Act on Competition Restrictions, representatives of these companies had for example exchanged information on the status and contents of negotiations of individual companies with Metsähallitus. The cartel was national in scope and in practice, it covered 100% of the pulp wood market and some 80% of the general roundwood market.

Metsähallitus is the largest individual seller of timber in Finland. Its market share in the domestic timber trade in the years in question was approx. 8%.

The timber trade of Metsähallitus is different in nature than that of other actors in the timber market, as Metsähallitus sells timber by delivery trade. The so-called gate price includes not only the actual timber but also its harvesting and transport as well as services provided throughout the delivery chain. According to Director General Jyrki Kangas, the cartel losses sustained by Metsähallitus thus affect the entire delivery trade price, as this is the only price on which the agency negotiated.

In order to estimate the value of cartel losses, Metsähallitus requested reports from three independent experts of economics and forest economics. The econometric studies were carried out on the basis of different source documents and partly employing different methods, thus striving to form as objective and correct an idea as possible of the extent of the cartel losses. According to Director General Kangas, however, conclusions to be drawn concerning the losses sustained by Metsähallitus as a result of the cartel are highly consistent.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.