The pricing policy of Kompania Węglowa (KW), one of Poland’s hard coal mining companies, does not constitute a competition restricting practice, according to an analysis conducted by the Office of Competition and Consumer Protection (UOKiK). 

The analysis followed a complaint filed by Lubelski Węgiel Bogdanka (LW Bogdanka), another Polish mining company. UOKiK’s research established that KW does not hold a dominant position on the market and its pricing policy is part of the company’s restructuring strategy to improve solvency and respond to adverse market developments. 

In two filings to UOKiK, dated February 4, 2015 and June 3, 2015, LW Bogdanka suggested the state-owned KW had used predatory prices and competition restricting practices on the coal market, using prohibited state aid to cover the resulting financial loss. UOKiK’s investigation did not support those claims.

According to the Polish competition law, the use of predatory prices can only be prohibited if they are applied by companies that have dominant position on the market. Given the European scope of the thermal coal market, KW has nowhere near a dominant position, even if the relevant market were to be narrowed into various sub-segments.

UOKiK findings showed that the company’s use of low prices for coal from stock was an attempt to improve liquidity and avoid bankruptcy in a market characterised by flattening demand and excess capacity on the European and global thermal coal market. As a result, coal prices fell globally by up to 55 percent from April 2011 to May 2015, reducing profitability of thermal coal mines around the world. 

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: biuroprasowe@uokik.gov.pl