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PR(97)04: Decisions on restraints of competition in the Norwegian forestry sector

11.10.2002

The EFTA Surveillance Authority decided yesterday against anti-competitive practices in the Norwegian forestry sector. Decisions were addressed to both buyers and sellers in the wood market. Industrial buyers of pulpwood, organised through the Norwegian Association of Paper and Pulp Industries, are to bring to an end an agreement by which their purchases are geographically partitioned. Similarly, it was decided that certain restrictive clauses in the by-laws of the undertakings organised within the Norwegian Forest Owners Association (NSF), should be brought to an end.

The Authority's examination of these cases originated in a formal complaint and notifications from the associations. Originally a third set of agreements were examined as well. These related to centralised or centrally co-ordinated price negotiations between the two central associations and an agreement between them to fix the level of commissions on the sale of round wood. In the course of the further proceedings, the parties declared that they would not retain any cooperation as regards prices on a national level, including the fixing of levels of commissions. Consequently, the Authority decided to close these cases.

However, the by-laws of the Norwegian Forest Owners Association and the standard by-laws of its constituent local and regional forestry associations contain clauses which give NSF the right to negotiate prices on behalf of its members and to impose market regulations. In addition, members are obliged to sell all their harvested round wood to the regional forestry association in their respective area. The Authority's decision is that these specific provisions go further than what could be justified under EEA competition rules and should be brought to an end. The Authority has, however, not questioned the co-operative aspects of the by-laws, and it has recognised that some cooperation on the sellers' side, given in particular the large number of small individual forest owners and the concentrated buyer side in the Norwegian forestry markets, would be warranted.

"The Norwegian forestry sector has not traditionally been characterised by effective competition. Although this is changing, I believe that the application of the EEA competition rules, as illustrated by these decisions, may give further impetus to a more efficient market in this sector to the benefit of all involved", says Hannes Hafstein, the Member of the Authority responsible for competition matters.

For more information, please contact Amund Utne on tel. +32-2-286 18 50 or Jonas Berggren on tel. +32-2-286 18 55.

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