Committee Reports::Report No. 21 - A review of state expenditure on The Forest and Wildlife Service::17 October, 1986::Appendix


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Committee Reports > List of Committees > Dáil > 1986 > Committee on Public Expenditure > Report No. 21 - A review of state expenditure on The Forest and Wildlife Service

Appendix (vii)

Document submitted by Department officials in support of allegations of collusion on tendering by sawmillers

The Department’s conviction that the trade has periodically endeavoured to influence, limit or control market prices and competition for lots of timber offered for tender by FWS is based on a deductive analysis of tender records over a period.

It is submitted that the facts deduced are entirely consistent with the Department’s conviction, and could not reasonably be regarded as merely co-incidental facts.

To avoid suggestions of breach of confidentiality in dealings between the Department and its customers specific lot numbers, forests or customers’ names are not identified.

The analysis here was confined to patterns in tendering before and after a meeting which the trade held in Autumn 1985 at a midland hotel.

The Department had been advised confidentially in advance by a member of the trade that his company had been invited to participate in a meeting for the purpose of regulating price levels for lots then on offer and subsequently to be sold by tender. The party in question deplored such interference with the market and declined to attend or participate.

At a later stage a customer enquired as to the success of his tender for a certain lot. When informed that his tender had been unsuccessful, he stated to the officer of the Department that he was bitterly disappointed at the result and that he would have tendered much higher to get it, but had refrained from doing so to avoid being regarded as a ‘scab’ but that patently some other tenderer had not felt so inhibited and had breached the agreed line to ensure his success.

The Department on another occasion was advised in confidence of a meeting in the north midlands between a small number of trade members with a view to organising the success of one of them for a particular lot. In the event another firm tendered a higher price and upset the planned arrangement.

Deductions from the analysis of tenders reveal the following:-

Before the Autumn 1985 Meeting		After the Meeting
1.	Highest tender 9% above FWS valuation on average	1.	Highest tender - 5% falling to 4% below valuation on average
2.	Variation between highest and lowest tenders - 32% on average	2.	Variation declined to 23% - falling to 19% on average
3.	No. of tenders per lot 5 on average	3.	No. of tenders per lot 3 on average
4.	For a group of major mills average no. of lots which each tendered for 28%	4.	For same group average now only 18%
5.	Success rate of mills referred to at (4) 15%	5.	Success rate now 29%
6.	At the one Auction held in July 1985 bids exceeded valuation by nearly 20%

The analysis covered lots with average size tree of .35m³ and higher - which would be those normally of interest to sawmills.

Average Price of Standing Coniferous Timber

(Comparison between Ireland and Britain)

Ireland (FWS)		Britain (BFC)
Y/E December	IR£m³	Y/E September	IR£m³
1983	8.72	1983	8.92
1984	12.11	1984	12.79
1985	14.64	1985	12.58

Note: FWS prices for March quarter 1986 down to IR£14.23/m³

BFC prices not available but Trade Journals indicate that prices are tending to increase.

Source: FWS and BFC price bulletins.

FWS July 1986