No indication for opening of the infringement proceeding against Hrvatske šume

Following a newspapers article alleging collusive behaviour between the members of the Wood Processing Association, the Croatian Competition Agency (CCA) analysed the letter of understanding signed by Hrvatske šume and the Wood Processing Association, the Government’s Strategy for the Development of Wood Processing and Furniture Production Industry of the Republic of Croatia for 2017 – 2020 and the Decision of Hrvatske šume on the basis of which invitation to tender for the sale of logs for 2108 was made.

The CCA found that the objective of the Decision concerned was not to share markets but exclusively to carry out the national strategy with respect to the development of wood processing and furniture production industry. The criteria listed in the invitation to tender were not discriminatory and ensured everybody free access to wood raw material under equal conditions.

Therefore, in this concrete case, there have been no indications for the opening of the infringement proceeding against the undertaking in charge of forests management in Croatia, within the meaning of competition rules.

However, within its competition advocacy commitment under the Competition Act, taking into account the fact that the Decision made by Hrvatske šume was preceded by the letter of understanding whose signatories are the members of the Association, who are at the same time buyers of the raw material concerned, the CCA noted that under the basic principles of competition law it would be advisable to change the existing practice and the criteria contained in the Decision should be adopted exclusively by Hrvatske šume in cooperation with the Ministry Agriculture.

At the same time, under its powers under the Competition Act, the CCA supports the initiative under which the criteria for the acquisition of a certain amount of wood raw material from Hrvatske šume should be incorporated directly in legislature (the Forests Act or its ancillary provisions) so as to protect the industrial policy of the Republic of Croatia, to ensure the basic principles of competition rules are respected and to avoid any potential anticompetitive effects of the practice concerned in future.