Czech competition authorities have fined state-owned forest company Lesy \u010cR CZK 17.27 million (\u20ac713,000) for restricting exports of wood chips and logging residues under a long-term supply agreement.<\/p>\n
The Czech Office for the Protection of Competition said the arrangement breached both Czech and EU competition rules by preventing one of Lesy \u010cR\u2019s customers from selling wood chips or logging residues outside the Czech Republic between July 2021 and July 2024. The decision is not yet final and Lesy \u010cR can appeal.<\/p>\n
The case centres on an agreement between Lesy \u010cR and customer CB-EKO. Under the contract, CB-EKO and its downstream customers were prohibited from both active and passive sales of wood chips, as well as logging residues intended for chip production, outside the Czech market. Compliance was backed by Lesy \u010cR\u2019s right to terminate the framework agreement.<\/p>\n
Export restriction treated as hard-core breach<\/strong><\/p>\n The competition authority rejected Lesy \u010cR\u2019s argument that the agreement had only limited practical impact.<\/p>\n According to \u00daOHS, the key issue was not how much material would actually have been exported, but the fact that CB-EKO lost the freedom to respond to foreign demand. The authority described the clause as a hard-core restriction capable of separating the Czech market from the wider EU market and limiting cross-border competition.<\/p>\n The restriction also extended beyond CB-EKO itself, as customers further down the chain were subject to the same export limitation.<\/p>\n When setting the fine, the authority took into account that Lesy \u010cR had initiated the arrangement, that it had been implemented and that the export ban was enforceable through the framework agreement. A mitigating factor was that Lesy \u010cR ended the conduct voluntarily once administrative proceedings started.<\/p>\n Lesy \u010cR remains dominant supplier<\/strong><\/p>\n The case is significant because of Lesy \u010cR\u2019s position in the Czech timber market.<\/p>\n The company manages more than 1.2 million hectares of state-owned forest, representing roughly 45% of the country\u2019s forest area and about 86% of all state forests. It is also the Czech Republic\u2019s largest producer of raw timber and sells both roundwood and logging residues.<\/p>\n Lesy \u010cR harvested around 8.1 million m\u00b3 in 2024, and logging is expected to remain around 7.7-8 million m\u00b3 annually in the coming years as the exceptionally high salvage volumes seen during the bark beetle crisis continue to decline.<\/p>\n That scale gives the company considerable influence over domestic raw material flows, particularly in lower-value assortments such as logging residues and energy wood.<\/p>\n Energy wood market under scrutiny<\/strong><\/p>\n The disputed contract covered precisely that part of the market.<\/p>\n Logging residues and wood chips have become increasingly important as fuel for biomass plants and industrial energy users, while competition for wood residues has intensified across Central Europe. Restrictions preventing material from moving across borders therefore have a direct effect on regional energy-wood markets.<\/p>\n \u00daOHS said the arrangement was capable of affecting actual or potential trade between EU member states even if no specific export opportunity could be identified afterwards. The authority\u2019s position is that the removal of commercial choice alone was sufficient for the clause to fall foul of competition law.<\/p>\n The ruling comes as Lesy \u010cR continues to play a central role in the Czech timber sector. The state company is planning annual harvests of around 8 million m\u00b3 through 2029 and has recently awarded new forestry and timber contracts worth several billion Czech koruna.<\/p>\n The CZK 17.27 million fine remains subject to appeal.<\/p>","protected":false},"excerpt":{"rendered":" Czech competition authorities have fined state-owned forest company Lesy \u010cR CZK 17.27 million (\u20ac713,000) for restricting exports of wood chips and logging residues under a long-term supply agreement.<\/p>","protected":false},"author":1,"featured_media":100140,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-100139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n