Market Court rules against Iittala

Finnish Market Court ordered Iittala Group Oy Ab, a subsidiary Fiskars (OMXH: FIS1V), to pay 3 million Euros in competition infringement fines. The fine will be booked as a non-recurring item in Fiskars’ 4th quarter results. The company had not taken a provision charge on the matter.

The court determined that Iittala attempted to block competition between resellers and raise the price level of its products systematically for at least a 2.5 year period in 2005-2007 aka engaged in resale price maintenance in distribution agreements in violation of the Finnish Competition Act. Iittala ordered lowest possible resale prices for most of its best known products. The Market Court considered this a serious infringement of competition law.

The products that were affected are well-known brands such as Kivi candle holders, the Maribowl, the Moomin products, the Teema series, the Aalto glassware, 24H and the KoKo products, many of which are considered collector’s items. Back in the day Iittala argued that it is in everyone’s best interests to maintain the brand status of such products. Moomin Mugs became the product most associated with the unfortunate outcome of consumers having been shafted in having had to pay more to get one.

Finnish Competition Authority (FCA) had proposed 4 million Euro infringement fine. Both Iittala Group and FCA may complain to the Supreme Administrative Court at their discretion. Fiskars acquired Iittala in 2007, and the violations in question happened prior to this time. Fiskars’ share price increased 2.5% in today’s trading.