Multi-million euro fine for Austrian timber companies

The Romanian Competition Council analyzed several tenders put out by various forest administrations and forest owners between 2011 and 2016. A violation of the competition rules was found in 45 cases. According to the Council, there were agreements between the competitors and an exchange of sensitive information on raw wood procurement, purchasing policy, in-house processes, the division of lots as well as agreements during the bidding process.

From the Competition Council’s point of view, the timber companies “suspended competition among each other while the tenders were out in order to purchase the timber at the lowest possible price”. In most cases, this was done to the disadvantage of the state, which earned less money as a result.

13 companies have agreed to the payment of fines. Austrian companies HS Timber Productions, Egger Romania, the three Kronospan Group subsidiaries Romania, Kronospan Sebeș and Kronospan Trading were among those fined. As part of the settlement, HS Timber Productions has to pay more than € 10 million, while Kronospan has to pay around € 9.5 million. Egger agreed to pay a € 4.7 million fine imposed by the Romanian Competition Council.

HS Timber Productions answered in a press release: After having analyzed the timber purchasing processes in the period in question, HS Timber Productions discovered deficiencies and immediately took the necessary measures to correct them. Since then, the company improved its due diligence system and defined clear rules and guidelines. In addition, HS Timber Productions introduced a code of conduct, which applies to all suppliers and aims at promoting a safe timber supply chain in Romania.

According to a press release, Egger Romania has agreed to the fine, which was imposed by the Competition Council, without reservation. Investigations showed that the behavior of Egger Romania employees was not in line with competition law in some cases. “During the procedure, we were cooperative from the beginning and provided the employees of the Romanian Competition Council with comprehensive information as part of the procedure”, says Thomas Leissing, spokesman of the Egger Group management. “The responsible employees of EGGER Romania did not initiate any of the ascertained violations of competition rules themselves, but they did not put a stop to those practices either.”