Lesy ČR banned wood-chip exports and were imposed a fine of more than CZK 17 million

The Office for the Protection of Competition (hereinafter referred to as the "Office") imposed a fine of CZK 17.268 million on the state-owned company Lesy ČR (Forests of the Czech Republic) for violating Czech and EU competition rules. Specifically, between 2 July 2021 and 31 July 2024, the state-owned company entered into an export-ban agreement with one of its customers, the purpose of which was to restrict competition in the markets for logging residues and wood chips. The decision is not yet final and Lesy ČR may still appeal against it.

Export-ban agreements are among the anticompetitive provisions that the Office has consistently sanctioned. The agreement between Lesy ČR and its customer CB-EKO restricted contractual freedom by imposing an absolute prohibition on both the company concerned and its downstream customers from engaging in active or passive sales of wood chips, or logging residues intended for their production, outside the Czech Republic. Compliance with the prohibition was secured by the possibility of terminating the framework agreement. “Such a provision directly eliminates cross-border competition and is aimed at separating the Czech market from other parts of the EU market; in other words, it prevents the creation of a single European market and undermines its integrative function,” said Kamil Nejezchleb, Vice-Chair of the Office.

Lesy ČR defended itself, among other things, by putting forward arguments intended to demonstrate the limited harmfulness of the agreement. The Office rejected these arguments, however, and assessed the agreement as anticompetitive. The amount of wood chips that might actually have been exported is irrelevant in this respect. “The agreement clearly restricted competition, specifically CB-EKO’s ability to export wood chips to other EU countries. This is generally regarded as a hard-core anticompetitive restriction, regardless of whether, in the absence of the export ban, the company would have exported the product repeatedly, only in individual cases, or ultimately would not have taken advantage of any specific foreign business opportunity,” Nejezchleb said. The decisive factor in assessing the case is that CB-EKO was deprived of the ability to decide whether to take advantage of foreign demand and that the agreement in question was objectively capable of affecting existing or potential trade between EU Member States.

Lesy ČR manages approximately 45% of the forest area in the Czech Republic and is the country’s largest producer of raw timber. Its principal activity is the management of more than 1.2 million hectares of state-owned forest land, representing almost 86% of the total area of state-owned forests. Its commercial activities consist primarily of the sale of timber and processed timber assortments, with Lesy ČR independently arranging both the production and sale of timber. Its commercial activities also include the sale of logging residues.

When calculating the fine, the Office primarily takes into account the company’s turnover in the relevant market. In this case, the Office took into consideration the fact that Lesy ČR had initiated the prohibited agreement, that the agreement had been implemented, that compliance was secured by Lesy ČR’s ability to terminate the framework agreement, and that the export ban had also been extended to other customers of CB-EKO. As a mitigating circumstance, the Office took into account the voluntary termination of the anticompetitive conduct, which the company ended immediately after the administrative proceedings were initiated.

 

Press Unit of the Office for the Protection of Competition

26/162 - S0733/2025