Big timber firms fined 26.6 million euros

The Romanian Competition Authority has fined big timber companies 26.6 million euros, according to a Facebook post by the RISE Project, an NGO comprised of journalists, programmers and activists who investigate organized crime and corruption in Romania and other countries in the region.

According to the official documents in their possession, 33 companies that currently operate in Romania were fined; the highest fine of EUR 10 million was imposed on the Austrian Holzindurstrie Schweighofer company. The firm was investigated several times over the past few years for illegal activities.

“This is the highest fine in the Romanian history of the Austrian company. The sanctioned illegal practices thus confirm several RISE Project investigations,” the group wrote on its Facebook page, adding that the Competition Authority started to investigate the underground agreements in the timber market in 2016.

“A five-year investigation eventually led to allegations against 33 major companies that violated the law for six years (2011-2016),” the RISE Project wrote, stating that the companies colluded on tenders, used their influence, shared private information about raw material needs and timber purchases, and neutralized the competition.

“By dividing up tenders and wood sources, depending on their own interests, the concerted agreements severely restricted competition from the perspective of the demand manifested in the analyzed market, altering the competitive process in the tenders,” says one document of the Competition Council, obtained by RISE.

Big timber firms
The fines in RON of the Competition Authority. Photo: Rise Project Facebook Page

Out of the 33 companies, 13 – including Alredia, Explosiv Group, Silva Logistics, Silvania International and Forest Land – admitted their actions, while the company with the highest fine, Holzindurstrie Schweighofer, also acknowledged involvement in illegal schemes. Two other Austrian companies that were also part of the investigation, Kronoșpan and Egger, also received fines.

Dan Banacu, the manager of Holzindurstrie Schweighofer, which changed its name to HS Timber Production in December of 2019, said that they won’t comment on ongoing inspections. “We will make a public statement after the official communication of a final decision,” Banacu said.

The Egger Group admitted that some of their employees made mistakes: “As a result of the investigation, it was found that certain responsible employees of the company did not behave exactly correctly from a competitive point of view. Although these employees did not themselves initiate any infringement of the competition rules, they did not stop the practices in question. That’s why we unreservedly agreed to pay this fine,” the company told RISE Project.

Title image (illustration): According to the competition authority, the big companies worked together to buy raw material at a lower price, putting smaller, Romanian buyers at a significant competitive disadvantage. Photo: femina.hu

Author: Orsi Sarány