JSC "Latvijas valsts meži" (LVM), considering the position of the Competition Council (CC) and its instructions to ensure free and fair competition in the timber market, has filed a lawsuit to declare long-term timber harvesting contracts invalid, while simultaneously requesting to suspend their action until the court decision comes into force, the company reported, writes LETA.
The company notes that the Competition Council (CC) has been conducting an investigation since 2020 into the long-term contracts concluded by the State Forest Service (SFS), which LVM subsequently assumed and administers in accordance with the law.
It is stated that a meeting of representatives of the CC and LVM took place on December 19, 2025, and on January 9, 2026, LVM received a letter from the CC expressing concern about the risks of violating competition legislation related to these contracts.
Respecting the position of the CC, LVM filed a lawsuit to declare the contracts invalid, requesting to suspend their action until a final court decision is made.
LVM explains that the history of these contracts dates back to times long before the establishment of the company itself and is not related to its creation and activities. When LVM was established 26 years ago, the law on the SFS required the company to assume obligations under such contracts. LVM emphasizes that throughout its entire operation, it has not entered into a single new long-term contract, but has only administered previously concluded ones.
Since its inception, the company has sought ways to terminate these contracts, considering the excessively long terms of their validity and the extension procedure carried out by regional structures of the SFS — district forestry units — to be illegal.
LVM has already appealed against the extensions of these contracts in 2000 and 2001, turning to the court. At that time, the court denied the claim and obliged the company to continue fulfilling the obligations arising from these agreements.
As previously reported, at the end of September 2025, the program "Nothing Personal" (Nekā personīga / TV3), citing the conclusion of the CC, reported that the long-term contracts of LVM do not comply with the principles of competitive neutrality.
The CC began investigating these agreements two years ago. The historical contracts were signed after the restoration of Latvia's independence to ensure a certain stability for state enterprises in the privatization process related to the primary processing of timber. LVM assumed obligations under these contracts but did not terminate them due to a court decision prohibiting this.
Since 2013, LVM has processed some exclusive agreements; however, some contracts remain unchanged and are valid for decades to come, one even until 2096. These agreements grant certain market participants special rights to purchase round timber, bypassing auctions conducted by the state enterprise. The guaranteed volumes of timber supplied by LVM to such partners are unavailable to their competitors.
As a result of a two-year investigation, the CC concluded that the execution of such contracts negatively affects competition in a specific market segment. Currently, certain companies holding such agreements are in a privileged position compared to others, who have to participate in auctions and compete with each other for timber, noted a representative of the CC.
The CC investigated LVM's transactions with companies that have long-term contracts for timber harvesting. Among them are several enterprises of the "Pata" group: "Pata Saldus", "Pata Strenči", "Pata Jēkabpils". Advantages were also granted to the subsidiary of "Pata Strenči" — LLC "Berivs", as well as LLC "Krebsar", LLC "Jēkabpils kokapstrāde", and LLC "Metsa Forest Latvia". From 2020 to 2024, over two million cubic meters of round timber worth more than 202 million euros were sold to such partners.
In 2024, LVM achieved a turnover of 586.129 million euros — this is 6.4% less than in 2023, and profit decreased by 32% — to 150.131 million euros.
The company was registered in 1999, with a share capital of 525.989 million euros. LVM manages state forest lands. The sole owner of the company is the state, and the shareholder is the Ministry of Agriculture.
