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Polish competition watchdog to investigate coal market

Poland's competition watchdog UOKiK said Tuesday it had opened an investigation into the way hard coal is distributed and sold in the country as rising cheaper imports eat into domestic producers' market share.

"The President of the Office has initiated an investigation which will examine the state of competition, concentration and market behaviour of businesses involved in the sale and distribution of hard coal," the Office of Competition and Consumer Protection said in a statement.

"The analysis will primarily focus on coal distribution in the country, its channels and sales' methods. UOKiK will also examine whether the pricing policy may be questionable from the point of view of competition," it said.

UOKiK said the investigation should be completed within 30 days, or a maximum 60 days if it proves particularly complex. If the investigation finds irregularities the watchdog can start proceedings against restrictive practices.

Prime Minister Donald Tusk told a meeting of mining officials and labor unions in Katowice earlier this month his government would probe the Polish coal trade to understand why Polish utilities were buying imported coal.

Last year spot Russian and AP12 coal sold on average for Zloty 9.70/GJ ($3.17/GJ) and Zloty 10.30/GJ respectively, compared to an average Polish coal price of Zloty 11.60/GJ.

Poland's and Europe's largest hard coal miner, state-owned Kompania Weglowa, is undergoing severe liquidity difficulties and currently has about 5 million mt of unsold coal stockpiled thanks to lower demand from utilities.

Earlier this month, it halted production at nine of its 15 mines for 8 days to cut costs.

Tusk said the investigation would analyse possible VAT evasion. But he strove to placate union members at KW who had planned a demonstration in Warsaw this month ahead of European Parliament elections on Thursday.

Source: Platts