VILNIUS — A claim by the Lithuanian National Advertising Association Linara that the Vilnius municipality is shutting out local companies from the outdoor advertising market has started a war of words with foreign-owned companies.

Vilnius is strewn with stand-up billboards along roads, on building walls and at bus stops. They are dominated by two companies, JCDecaux, which also manages the city’s glass bus stop structures, and ClearChannel.

Linara’s chief Tomas Jankauskas has singled out these two companies and Baltijos Vaizdinė Reklama, a billboard producer, as an illegal monopoly sanctioned by the city.

“These companies currently work illegally in the capital. Nothing has changed after the investigation that was done half year ago,” Jankauskas said regarding the discovery of expired contracts that the companies held with the city. He claims that the companies continue to work in the capital despite them not having contracts. Meanwhile other companies cannot apply for new tenders because there are none.

Artūras Štaudė, managining director of Clear Channel Lietuva, told Baltic Reports that while their contract officially ran out, they still have mutual cooperation with the city.

“The contract with the Vilnius municipality was signed in 2000 and was valid for the five years, until 2005. Appropriate clauses of the contract says that the contract may be extended having mutual consent on extension conditions. No doubts that we have expressed in writing many times to do so, but in the municipality they always had a initiatives to set so called general plans for visual advertising, arranging a public contest for certain locations and so on. Naturally, they always postponed signing the new contract,” Štaudė said.

“At the same time contract parties continued to cooperate having a numbers of social projects, information campaigns and so on. All the time through the company kept paying agreed taxes strictly according to the contract terms and fulfilling other contract issues,” he said.

Štaudė said that the company pays 665,000 litai (€193,000) in taxes each year despite not having an official contract.

Linara says that JCDecaux should have stopped their work in the capital by the end of 2009, but the company told Baltic Reports that they have a separate contract that validates their work.

“JCDecaux has a valid contract the Vilnius municipality, a cooperation agreement, which was signed on 2007 March 20 and is valid for 15 years from the date of signing. The pages 3 and 4 of this agreement specify the agreements that have been taken over by this general cooperation agreement. This cooperation agreement permits JCDecaux to install and use the listed outdoor advertising equipment in the city and has JCDecaux has duties to install and supervise the established list of bus shelters in the city,” JCDecaux representative Gediminas Pranevičius said.

“This agreement is kind of agreement for investment to the city’s infrastructure. Due to the huge investments made by JCDecaux according to this agreement, the city guarantees recovery of the expenses by placing the outdoor advertising,” he said.

The Vilnius Municipal Inspector Šarūnas Skučas told Baltic Reports that there would be a tender soon, but admitted that the companies were working in the city without a permit currently. He denies claims however that there is a “monopoly.”

“There is no monopoly because there is a tender for all companies to participate in and the tender will be in October,” Skučas said.

“Its not a good situation, because they dont have permits to work, but they are working until now and we are happy because they pay taxes,” he said.

Both companies told Baltic Reports that Jankauskas just wants the foreign companies out so a local company that he represents can move in and take the untapped market.

“He complains that municipality breaches equal competition possibilities not arranging the new contests for locations where other outdoor companies already have invested in infrastructure and so on installing their measures. He insists that foreign companies operating in the market for many years have to remove all their equipment thus providing possibilities for a “national business” to take their place,” Štaudė said.

“Linara represents mainly one newly established company – SKR Invest. This company wants to take the stake from the outdoor advertising market in Vilnius just paying the municipality levies for exposition of outdoor advertising; however avoiding any costs for investment into the city’s infrastructure,” Pranevičius said.

Linara doesn’t deny the positions of the two companies.

“It looks like only foreign-owned enterprises have real opportunities to expand their enabling outdoor advertising business has. Linara unites 18 Lithuanian companies and only two of them are specializing in outdoor advertising business. These companies have prepared a unique outdoor advertising project, but unfortunately Vilnius municipality didn’t make any effort to review it. The project, worth 7 million litai, which would add additional 2 million litai to Vilnius budget each year appears to be unnecessary for Vilnius city municipality,” Jankauskas said.

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