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PR(94)27: Finnish timber trade reorganised to comply with EEA competition rules

2.10.2002

In order to comply with EEA competition rules, the Finnish Forest Industries Federation (Metsäteollisuus ry, Skogsindustrin rf.) and the Central Union of Agricultural and Forestry Producers (Maa‑ja metsätaloustuottajain Keskuslitto MTK r.y.) have decided to abolish an earlier agreement on timber supplies and replace it by a new agreement dated 21 November 1994.

Analyses made by the EFTA Surveillance Authority had shown that the original agreement of March 1994 included restrictive elements relating to fixing of prices, foreclosure of imports and regional volume targets. Such restraints are prohibited under the EEA Agreement, which contains provisions identical in substance to the competition rules of the European Communities.

In the new agreement, the parties have developed long‑term foundations for a competitive trade in round wood, which should at the same time secure a sound development of the national economy by enabling an optimal use of forest resources. Its main aim is to secure a sufficient supply of round wood at competitive prices. All elements relating to price fixing, import restrictions and regional volume targets will be abolished.

The parties have also agreed, in a separate letter of intent, to establish a working group to investigate and develop new methods and means to render trade in round wood more competitive and to safeguard the proper functioning of the market in the long term. The group shall i. a. develop statistics for market transparency, electronic market places and various forms of contracts. It shall further elaborate various measures aiming at an effective competition in this market.

The EFTA Surveillance Authority, which in the application of competition rules has a role corresponding to that of the European Commission, has consequently decided to publish its intention to take a favourable view to the new agreement.

"Through these arrangements the Finnish timber market will take an important step towards effective competition. is should be pioneering to other comparable markets", says Nic Grönvall, Member of the Authority responsible for competition. "It also demonstrates that the forestry industry's need for reliable supply, and the forest owners' interest in a sustainable development, can be safeguarded without eliminating competition."

For further information please corntact Arni Vilhjalmsson (Competition Directorate) on tel. 22 66 865.




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