Kronospan, fined by the Competition Council

The Competition Council ruled that Kronospan must pay a fine worth 34 billion ROL (870,000 euros) for abusing the dominant position it holds on the chipboard market, announced Mihai Berinde, chairman of the institution.

The fine imposed to Kronospan company is the highest sanction ever decided by the Competition Council against a single economic unit, Berinde specified. This accounts for about 1% of the value of annual revenues derived by Kronospan Romania. “At the same time, Kronospan will be monitored for 24 months, and so will be the evolution of costs and the development of activities, on a contractual basis, in the relation with furniture producers,” he also said.

Contacted by Ziarul Financiar, Kronospan representatives on Wednesday said they could not comment on the decision of the Competition Council as yet.

The law gives the company the right to file an appeal in court, and if it does, the penalty is suspended until a ruling is delivered by the court.

The Austrian chipboard producer Kronospan this June acquired the two plants owned in Sebes by the Italian company Gruppo Frati, in a deal worth 250 million euros.

Shortly after the deal was concluded, the Competition Council received information from domestic furniture producers that chipboard prices had been raised by 40% on average, with the raise having no justification.

For gross PAL, there are another four producers on the Romanian market, with capacities about ten times lower than Kronospan’s, though, and in the case of laminated PAL there are only imports.

Annual sales logged by the two plants that were purchased by Kronospan in Sebes are estimated to range between 80 and 100 million euros, and the closest PAL plant of the size of the one based in Sebes that is not controlled by Kronospan belongs to the rival Egger group, of Austria.

Chipboard is the main raw material in the furniture industry, and furniture producers warned that the raise of PAL prices threatens to endanger export contracts and lead to an increase of up to 20% in prices of furniture on the domestic market.

In their turn, Kronospan representatives accounted for the decision to raise prices by the need to adjust domestic prices to European market ones.

In the wake of complaints filed by furniture producers, the Competition Council unleashed an investigation on whether article 6, letter a, of the Competition Law had been breached. The respective article refers to “the direct or indirect imposition of sale prices, or tariffs or other contractual clauses and the refusal to negotiate with certain suppliers or beneficiaries”.
georgiana.stavarache@zf.ro