Bundeskartellamt prohibits the joint marketing of round timber in Baden-Württemberg

Today the Bundeskartellamt has issued its final decision in the round timber proceedings against the federal state of Baden-Württemberg. Via its state company Forst BW Baden-Württemberg has so far marketed wood not only from its own state forest but also from communal and private forests. In the view of the Bundeskartellamt the joint marketing violates competition law provisions. Extensive opportunities for cooperation between the different forest owners remain unaffected by the decision.

Andreas Mundt, President of the Bundeskartellamt:"Apart from their important function as a place of nature and recreation forests are also an economic factor. This aspect must be governed by competition principles, and examples from other federal states show that this can work very well. As the state of Baden-Württemberg withdrew an earlier proposal submitted last year for a solution which would have been in line with competition law, we had to issue a prohibition decision. According to announcements made so far by the state's government the matter will probably be brought before the courts. We have taken this possibility into account in our decision and provided for interim periods."

In its decision the Bundeskartellamt states that the agreements on the joint marketing of coniferous stem wood concluded between the state of Baden-Württemberg and private and public forest owners violate German and European competition law. Agreements are exempted from the prohibition if public entities, private forest owners or forest management associations each own no more than 100 hectares of forest.

The decision prohibits the state of Baden-Württemberg from selling and invoicing wood on behalf of the other forest owners and from carrying out the following services directly related to the marketing of timber: Timber marking, management of wood harvesting measures, timber inventory and printing of timber lists. This also applies to persons who are employed in the lower forestry authorities as long as these report to and/or are supervised by the federal state.

For the marketing of timber from owners of forests of at least 1,000 hectares the prohibition will take effect from 1 January 2016. For smaller forests and the services directly related to the marketing of timber the prohibition will take effect from 1 July 2016.

Furthermore, with effect from 1 July 2017, the federal state of Baden-Württemberg is prohibited from carrying out annual operational planning measures, technical forestry management and forest ranger services on behalf of owners of more than 100 hectares of forest. However, this prohibition is only applicable as long as the federal state continues, as before, to have these services carried out by persons who also manage the state-owned forests and/or have access to competitively relevant information on the marketing of timber from the state forests. Already from 1 July 2016 these services may no longer be carried out if the federal state offers them at prices that do not cover its costs. The prices charged so far did not cover the costs of providing these services and thus prevented competition from other suppliers.

As to the interim periods provided for by the decision, the Bundeskartellamt took particular care to ensure that the forest owners, which are indirectly affected by the decision, will have sufficient time to reorganise their forest management. In particular with regard to technical forestry management and forest ranger services the Bundeskartellamt has provided the federal state of Baden-Württemberg with an adequate period of 1 1/2 years from the decision to seek judicial clarification if it so wishes.

The public version of the decision is available (in German) on the Bundeskartellamt's website.