Companies involved in Finnish wood cartel from 1997-2004 to face lawsuits

Yle reported this morning that private forest owners who sold roundwood to UPM (OMX: UPM1V), Stora-Enso (OMX: STERV) and Metsäliitto [Metsäliitto Cooperative is the largest shareholder in M-Real (OMX: MRLBV), M-Real is not involved] are going to sue the companies for damages suffered from the cartel that was in place from 1997 to 2004. STT reported on Tuesday that as an example, the city of Jyväskylä might have lost 1.2 million Euros

Stora Enso and Metsäliitto were both given competition infringement fine by The Market Court in 2009, the total amount of which was 51 million Euro. UPM escaped a fine on the grounds of being the party that tipped authorities on the existence of the cartel. The Market Court did not prove actual price agreements between companies but concluded that companies were aiming at stable price development for round timber.

On 04.01.2011 Finnish Forest Research Institute (Metla) estimated that damages suffered by forest owners could have been over 1 billion Euro including non-direct losses and interest payments until now. A private forest machine selling entrepreneur has been urging individual sellers to join in a class action suit and Association of Finnish Local and Regional Authorities has been coordinating municipalities’ actions. Supposedly hundreds of private forest owners and a couple dozen municipalities may file suit.

The municipalities are hiring an advocate to conduct a research on the damages suffered and will decide on a lawsuit on the basis of that. Numerous parishes are also looking into the possibility of joining in. Finnish Metsähallitus (Administration of Forests,) has already made a claim of 282 million Euro, which is in preparations in district court. The Pulp & Paper sector companies involved say the claim is baseless. Lawsuit need to be filed before the end of the year.