Latvia's state forestry company fined €7.86 million for competition breach
Latvia's Competition Council has fined state forestry company Latvijas valsts meži €7.86 million for giving unfair advantages to six long-term logging contract partners. The company must also end the discriminatory practice and ensure equal market access going forward.
Latvia's Competition Council (KP) announced on Thursday that it has fined state forestry enterprise Latvijas valsts meži (LVM) €7.86 million for breaching competition law. According to KP chair Ieva Šmite, the violation concerns so-called long-term logging contracts (IML) signed with select business partners.
What was found
The council determined that six LVM partners — Pata Saldus, Pata Strenči, Pata Jēkabpils, Berivs, Krebsar and ACA Timber — received privileged access to timber and logging rights without having to compete in public auctions. Meanwhile, other market players could only obtain resources through auctions, competing among themselves for limited supply. KP concluded this reduced business risk for the favored partners, discriminated against other companies, shrank the volume of coniferous sawlogs available on the open market, and distorted competition in the timber sector over a long period, with knock-on effects for related industries.
Beyond the fine, KP imposed two obligations on LVM: to stop granting IML-related advantages to its partners, and to adopt sales procedures for timber that give all interested market participants equal purchasing opportunities.
A long-running dispute
As of 2023, 11 such contracts remained in force, with the longest running until 2096. KP formally opened its case regarding IML implementation after 2020 this past February, but talks with LVM aimed at resolving the issue had already begun in December 2024. Throughout the process, KP repeatedly urged LVM and the Ministry of Agriculture to find a solution, including a November 2025 meeting with then-Agriculture Minister Armands Krauze. No concrete proposals materialized, and a December deadline to fix the situation was missed.
LVM has stated that the contracts' origins predate its own founding in 1999 and that it has never signed a new IML, only administered legacy agreements. The company has already filed a lawsuit seeking to have the contracts declared invalid. LVM reported revenue of €604.6 million and profit of €206.73 million in 2025.
