Off the wire

  • 2001-09-13
EU ORDERS SALE: European Union competition regulators, responding Sept. 5 to plans by Swedish giants SEB and Swedbank to merge, said they expected the two to dispense with some of their assets in the Baltic states. SEB is the majority owner of Estonia's Uhispank while Swedbank owns Hansabank. The document is confidential, but according to the Swedish business daily Dagens Industri the regulators do not intend to prevent the merger, the daily Aripaev wrote. According to Aripaev the document states the EU's views on the extent to which merging the two banks would hurt competition. The merger in the Baltics was one of three aspects of the deal which came under the spotlight. The others were investment funds, where the banks' combined market share would be 56 percent and card and payment services, where the regulators said the combined companies' share would be too large. The banks must submit proposals addressing these issues to Brussels by Oct. 16, one month before a final decision is to be made. Before that a hearing will take place on Sept. 24, when the banks will have an opportunity to defend and justify their merger before the European Commission, competition officials of EU member countries and other parties.

LESS HERRING: The Baltic fisheries commission has ordered a cut in next year's Baltic herring quota by one-third. The commission, which met last week in Krakow, Poland, set the 2002 quota of fishing for Baltic herring in the Baltic Sea at 200,000 tons, according to the head of the Estonian Environment Ministry's fish stocks department, Kristiina Muhlbaum. Estonia's share of the total would be slightly over 10 percent, meaning Estonian fishermen could catch only 20,280 tons of Baltic herring next year, or half of last year's amount of 41,070 tons. Muhlbaum said Estonia is not prepared to accept a cut of this order and will contest the ruling within 90 days. Fish researchers here are of the opinion that stocks of Baltic herring in Estonian waters and the Gulf of Riga in particular are in a better state than elsewhere in the Baltic Sea and therefore Estonia cannot agree to a proportional reduction of quotas.

SMOKERS' HEAVEN: Latvia's only tobacco producer, the Danish-owned House of Prince company, last year posted pre-tax profits of 1.1 million lats ($1.74 million) on a turnover of 21.2 million lats. House of Prince Executive Director Vladimirs Camans told reporters Sept. 6 that the company's turnover increased by 4.7 million lats or 22 percent over the previous fiscal year. For House of Prince, the fiscal year starts July 1 and closes June 30. In the previous fiscal year the company posted a net profit of 69,000 lats, and the year before that the company was 600,000 lats in the red. Camans said House of Prince had boosted its production efficiency by 10 percent over the year. This was possible due to investments totaling around 373,000 lats last year. House of Prince's output last year was 2.6 billion cigarettes and this year the company expects to produce about 3 billion cigarettes. Of the total output, some 1.4 billion cigarettes are sold on the Latvian market, about 1 billion go to the United States and the rest are exported to Lithuania and Estonia.

BIG BOYS COMING: In the opinion of the leading Baltic computer manufacturer, MicroLink, merger of the U.S. computer firms Hewlett-Packard and Compaq would not change the power balance on the Estonian computer market. But it would benefit MicroLink. "We think competition is welcome and MicroLink takes a cool stance toward such a development," said company spokesman Marti Schmidt. He said that computer manufacturing now constitutes only 20 percent of MicroLink's sales. A merged HP and Compaq would not occupy as large a part of the Estonian computer market as MicroLink has so far, he added. "Besides, a considerable proportion of sales made by companies in the MicroLink group are of HP and Compaq products, so the success of those brands can only please us," he said. But Andres Agasild, a partner in the Helmes company, also in Estonia's computer market, told the business daily Aripaev that Compaq's market share was 21 percent and HP's 8 percent last year. With MicroLink having a 30 percent share a merged HP-Compaq would threaten MicroLink's dominance in Estonia.

GAS PIPES CONNECTED: The prime ministers of Lithuania and Poland discussed the possibility of connecting the two countries' gas pipelines at a meeting in Warsaw on Sept. 5. Algirdas Brazauskas met his Polish counterpart Jerzy Buzek during a working visit marking the 10th anniversary of the establishment of diplomatic relations between Poland and Lithuania. Brazauskas expressed support for an agreement between Poland and Danish and Norwegian gas companies on the construction of a gas pipeline in those countries, the government press service reported. Under the agreement, Norway would supply 74 billion cubic meters of gas over a 16 year period. Poland had earlier signed an agreement with Denmark on the supply of 2.5 billion cubic meters of natural gas per year. Brazauskas said the Lithuanian government would look for ways to include the connection of the Lithuanian and Polish gas pipelines in the privatization program of the Lithuanian gas utility Lietuvos Dujos. The prime minister said he intends to discuss the issue with his Latvian and Estonian counterparts, seeking the neighboring countries' participation in the project.

TRICKS OF THE TRADE: The Lithuanian telecommunications monopoly Lietuvos Telekomas asked the Lithuanian Competition Council to scrutinize an advertisement which appeared in the press for Tele2 mobile telephone services. The advertisement uses a photograph of Tapio Paarma, Lietuvos Telekomas chief executive next to the text, "It seems that some operators hear only themselves." Another text, near the Tele2 trademark at the bottom of the page says, "Others listen to consumers." "After accumulating information and arguments, a decision will be made on whether or not there are any grounds for an investigation into this advertisement," said Palmira Kvietkauskiene, a spokeswoman for the council. Darius Silas, a spokesman for Tele2, said he had not been informed of the move by Lietuvos Telekomas. Silas said he expected the advertising campaign which started in the Lithuanian daily newspapers on Aug. 31, to be halted.