1997R2025 — EN — 17.10.1997 — 000.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL REGULATION (EC)No 2025/97
of 15 October 1997
imposing a definitive anti-dumping duty on imports into the Community of advertising matches
originating in Japan and collecting definitively the provisional duty imposed
(OJ L 284, 16.10.1997, p. 57)
Corrected by:
►C1Corrigendum, OJ L 63, 10.3.2000, p. 42 (2025/97)
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COUNCIL REGULATION (EC)No 2025/97
of 15 October 1997
imposing a definitive anti-dumping duty on imports into the
Community of advertising matches originating in Japan and
collecting definitively the provisional duty imposed
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
HavingregardtoCouncilRegulation(EC)No384/96of22December
1995onprotectionagainstdumpedimportsfromcountriesnotmembersof the European Community(
1), and in particular Article 23 thereof,
Having regard to Council Regulation (EEC) No 2423/88 of 11 July
1988 on protection against dumped or subsidized imports from coun-tries not members of the European Economic Community(
2), and in
particular Article 12 thereof,
Having regard to the proposal submitted by the Commission after
consulting the Advisory Committee,
Whereas:
A.PROVISIONAL MEASURES
(1)By Commission Regulation (EC) No 1092/97(3) (hereinafter
referredtoastheprovisionaldutyRegulation)provisionaldutieswere imposed on imports into the Community of advertisingmatches falling within CN 36050000 and originating in Japan.
B.SUBSEQUENT PROCEDURE
1.Duration of provisional measures
(2)In July 1997 exporters representing a significant percentage of
the trade involved objected to the Commission’s proposal toextend the four months validity of the provisional anti-dumpingdutiesfortwomoremonthsasallowedbyRegulation(EEC)No2423/88 (hereinafter referred to as the basic Regulation). Insupport of this position, they argued that the investigation hadalreadytakenanexcessivelengthoftime,thusprolonginguncer-tainty and damaging their business.
(3)Thisobjectionseemstobeincontradictionwiththerequestmadeby the exporters concerned that the Commission should analyseinmoredepthseveralkeyissuesintheinvestigation:itshouldberecalledthattheCommissionhasalreadystatedinrecital7oftheprovisional duty Regulation that the present investigation hasbeen particularly complex. In these circumstances, further in-depthanalysisofargumentsputforwardbytheseparties,aswellasextensionsgrantedtothemforsubmissionsandreplies,hadtobe restricted to a minimum.
(4)Following the imposition of provisional anti-dumping measures,the following interested parties submitted comments in writing:
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Regulation (EC) No
2331/96 (OJ L 317, 6. 12. 1996, p. 1).
(2) OJ L 209, 2. 8. 1988, p. 1. Regulation as last amended by Regulation
(EC) No 522/94 (OJ L 66, 10. 3. 1994, p. 10).
(3) OJ L 158, 17. 6. 1997, p. 8.
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(a) producers/exporters in Japan:
— Kobe Match Co. Ltd, Ibo-gun,
— Yaka Chemical Industry Co. Ltd, Himeji,— Daiwa Trading & Industrial Co. Ltd, Himeji,— Harima Match Company Co. Ltd, Himeji;
(b) the representative of the Community industry on behalf of
their clients;
(c) importers located in the Community:
— Advertising support Werbeträger Vertriebs GmbH.
(5)Thepartieswhosorequestedweregrantedanopportunitytobe
heard by the Commission.
(6)TheCommissioncontinuedtoseekandverifyalltheinformationit deemed necessary for the purpose of its definitive findingswithin the period of time available.
(7)Partieswereinformedoftheessentialfactsandconsiderationsonthebasisofwhichitwasintendedtorecommendtheimpositionofdefinitiveanti-dumpingdutiesandthedefinitivecollectionofamounts secured by way of provisional duties. They were alsogranted a period within which to make representations subse-quent to this disclosure.
(8)The comments submitted by the interested parties were consid-ered,and,whereappropriate,takenintoaccountinthedefinitivefindings to the extent that they were fully substantiated.
2.Request for termination of proceeding
(9)Japaneseexportersrequestedthattheproceedingbeimmediately
terminated on the ground that the Commission had breachedArticle 7 (9) (a) of the basic Regulation. They claimed that theinvestigationwasaveryordinaryoneandthatitwasverylikelythatitcouldhavebeenconcludedwithinthetimelimitprovidedfor in the basic Regulation.
(10)Asalreadymentionedinrecital7oftheprovisionaldutyRegula-tion, the length of the investigation was mainly due to itscomplexity, particularly the detailed examination of the manyfiguresandargumentsputforwardaswellasthedifferentissuesand problems which arose in the course of the investigation.
Inthisrespect,giventheclaimoftheJapaneseexportersandthe
viewsexpressedbyotherinterestedpartiesonthedurationoftheinvestigation it seems appropriate to explain in some detail themain events which had a significant impact on its duration.
(11)FollowingtheinitiationoftheinvestigationinAugust1994,threedifferent types of questionnaires were sent to some 15 differentcompanies in the Community and in Japan. Verification visitswereconductedandpreliminaryresultswerereachedwithinthefirst half of 1995.
(12)Asindicatedinrecital39oftheprovisionaldutyRegulation,theinvestigationhadthenshownthatsalesmadebyJapaneseexpor-tersintheCommunitywerenotatthesameleveloftradeasthelarge majority of the Community industry sales. Accordingly alevel of trade adjustment had to be calculated. Considering theimportance of the adjustment, in particular its direct impact onthe undercutting and underselling margins, and consequently onthe level of the possible anti-dumping duties, this issue wascarefully considered before a provisional decision was taken.This already indicates that, contrary to the allegation made bysomeJapaneseexporters,complexissueshadtobedealtwithinthisinvestigation.Aconsiderableamountoftimehadtobespenton assessing the level of trade adjustment and a preliminaryconclusiononthisissuecouldnotbemadeuntiltheendof1995.
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(13)In the first half of 1996, the representative of the Community
industryemphasizedtheweightandimportanceofthesegmenta-tionofthemarketintothreemaincategoriesofcustomers.Inthisrespect, the Community industry supplied complementary infor-mation on the link between the segmentation of the market andthelevelofpricesandrelativecosts,thuselaboratingonthedataalready submitted in the responses to the questionnaire.
InaccordancewithArticle7(2)(a)ofthebasicRegulation,the
Commission verified and analysed all the substantiated comple-mentary information supplied and carried out the necessaryreconciliationwiththeverifiedresponsestothequestionnaireoftheCommunityindustryandtheJapaneseexporters.Theseaddi-tional tasks took until the end of 1996.
(14)Consequently,ithastobepointedoutthatcontrarytotheallega-tionofsomeJapaneseexporters,theCommissiondidnotacceptany new responses to the questionnaire from the Communityindustryyearsafterthedeadlineset,butconsidereditappropriatetoinvestigatefurthersubstantiatedinformationwhichcompletedthe responses already received.
(15)During1996,severalotherproblemshadtobesolved.Thussomeunrelated importers and one Community producer itselfimporting dumped advertising matches from Japan, who wereoriginally not opposed to the proceeding, made their viewsknown and put forward arguments related to the assessment oftheCommunityinterest.Allthesubmissionsmade,insomecasesreceived late in 1996, had to be given due consideration.
(16)In 1997 the Commission became aware that one Japaneseexportermighthaveprovidedmisleadinginformationduringtheinvestigation and requested that additional information beprovidedinordertotakeafinaldecisiononthematter.Conclu-sive evidence was only received recently.
(17)Inthelightoftheabovefactsandconsiderations,eventhoughthedurationoftheinvestigationwaslong,theCouncilreferstothestatement made in recital 7 of the provisional duty Regulation,namelythatthelengthoftheinvestigationismainlyattributabletoitscomplexityand,therefore,considersthatthereisnoreasonfor terminating the proceeding on these grounds.
C.PRODUCT CONCERNED AND LIKE PRODUCT
(18)For the purpose of its preliminary findings, the Commission
considered advertising matches produced and sold in theCommunity, produced and sold in Japan and those exported totheCommunityfromJapanas‘likeproducts'withinthemeaningofArticle2(12)ofthebasicRegulationbecausetheyareeitheridentical or have characteristics closely resembling each other.
(19)Animporterprovidedalistofaround50modelswhichJapaneseexporters can offer to their Community clients alleging that theCommunity industry can only offer a few models.
(20)It should be pointed out that not all those Japanese models arealso sold in the Community; they are simply part of a list ofmodels that the Japanese exporters are offering to theirCommunity customers. Furthermore, the investigation contra-dicted the allegation of another importer that the Communityindustrydoesnotoffer,incontrasttoJapaneseexporters,awiderangeofmodelsofadvertisingmatches.Indeed,itwasfoundthatthe Community industry sold over 30 different models to itscustomers and that numerous, other personalized models hadbeen produced to clients’ specifications.
(21)Sincenoothercommentswerereceivedontheproductconcernedandthedefinitionofthe‘likeproduct',thefindingsmadeonthisissue,asestablishedinrecital9oftheprovisionaldutyRegula-tion, are confirmed.
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D.DUMPING
1.Normal value
(22)Before imposition of the provisional measures, the Commission
receivedinformationthattherelationshipbetweentheproducer-exporterYakawithanotherJapaneseproducer—NittoshaMatchCompanyLtd,whichdidnotmakeitselfknownintheframeworkof this proceeding — might not only be limited to a relativelysmallshareholding.TheCommissionconsideredthatitcouldnotbe excluded that Yaka’s export prices might have been influ-enced by its relationship with Nittosha, which would renderYaka’s reply to the questionnaire unreliable for the purpose ofthis investigation. The Commission informed Yaka forthwith ofthe serious implications this might have.
Nittosha eventually informed the Commission that during the
period of investigation on dumping it had exported to theCommunity the product concerned; the quantities it exported,however,hadbeennegligibleinrelationtotheexportsmadebyYaka during the same period. Under these conditions, exportsfromNittosha could not have influenced those of Yaka; m ore-over,basedonverifiedinformationYakademonstratedthattrans-actions between the two companies had not been influenced bythe existence of the small shareholding.
Itwasconcludedthattherewasnoreasontoreversethefindings
in respect of Yaka as an independent exporter fromJapan.
(23)One Japanese producer claimed that for export orders of 5000units the normal value should exclusively be based on suchquantitiesandnotalsoonordersforlowerquantitiessinceordersof for instance 1000 or 2000 units are usually sold at higherprices.
Firstly,itshouldbenotedthatforthepurposeofthisproceeding
an order category of up to 5000 units was defined by thisproducer in its response to the questionnaire. Secondly, it wasfoundforthisindustrythatforordersupto5000unitsnodistinctdifference in prices exists and that orders of substantially lessthan 5000 units only represent a relatively small part of thecategory up to 5000 units. Thirdly, the normal value and theexport price were both established on the basis of the samecategoriesofproductsandsothecomparisontakesintoaccounttheordersizesinasfarastheyareconsideredtoberelevantbyindustry standards.
Consequently, the claimhas to be rejected.
(24)Nofurthercommentswerereceivedonthedeterminationofthe
normal value. The Council therefore considers that the findingsasestablishedinrecitals10to17oftheprovisionaldutyRegula-tion are to be confirmed.
2.Export price
(25)As no comments were received on the determination of the
export price as established in recital 18 of the provisional dutyRegulation the Council considers that the findings made thereinare to be confirmed.
3.Comparison
(26)One Japanese producer claimed that no adjustment should be
madeforsalesmen’ssalariesasonexportsalesnosalesmenwereinvolved.Duringtheon-the-spotverifications,atthepremisesofthecompanyconcerned,itwasestablishedhoweverthatsalesmenwere indeed involved in the export of advertising matches.Consequently,inordertoallowforafaircomparison,anadjust-ment was made to the export price on the basis of the corre-spondingcostincurredinexportsalesoftheproductconcerned.
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(27)ThesameJapanesecompanyrepeateditsclaim,alreadymadeat
theprovisionalstageoftheinvestigation,toestablishthenormalvalueonlyonsalestounrelateddistributorsas,accordingtothiscompany,exportsalesweretakingplaceexclusivelyatthislevelof trade.
Recital 20 of the provisional duty Regulation explains why the
claimcouldnotbeaccepted.Sincenonewargumentsinsupportofthisclaimhavebeenputforwardbythecompany,therejectionof this claimis confirm ed by the Council.
(28)TwoJapaneseproducersreiteratedtheirclaimthatanadjustmentshould be made for print film making and artwork.
TheclaimwasbasedonthefactthatforsalestotheCommunity,
generallytheprintfilmwassuppliedbythecustomer,whileforsalesontheJapanesemarketingeneral,itwastheproducerwhosupplied the artwork and the filmm aking.
One Japanese producer also further claimed that an adjustment
shouldbemadeforthosedomesticordersforwhichaparticulartypeofpaper,called‘Japanesepaper'wasused,becausethistypeof finishing of the product was not offered for sales to theCommunity.
Both claims were rejected at the stage of the provisional duty
Regulation as the company concerned was not in a position toquantifythemarketvalueoftheadjustmentclaimedtothesatis-faction of the Commission.
Afterdisclosureoftheessentialfactsleadingtotheimpositionof
provisionalmeasurestheJapaneseproducerssubmittedadditionalinformation and explanations on the basis of which it waspossible to determine the market value of the adjustmentsclaimed.OneoftheJapaneseproducerswasnotinapositiontodemonstratethemarketvalueoftheadjustmentclaimed.Astheclaimitselfwasconsideredtobejustifiedtheadjustmentforthisproducer was made by reference to another producer in Japan.
Consequently the claimwas granted to the extent that it was
justified.
(29)One Japanese producer maintained its request, already made attheprovisionalstage,thatanadjustmentshouldbemadeforthedifferences in time of delivery.
Thisrequestwasbasedonthegroundsthatthedomesticdelivery
delayis,generally,muchshorterthantheoneforexporttransac-tionsandthatthecustomersintheCommunityarechargedlowerprices because of the longer delay in delivery.
In this respect the company concerned did not substantiate its
claimin particular by showing that custom ers consistently paydifferent prices on the domestic- and/or export markets becauseof the different delivery delays.
Therefore the request has to be rejected.
4.Dumping margins
(30)ThecomplainantarguedthatastheexportpricesoftheJapanese
producers are, generally, at the same level and as the Japanesedomesticmarketishomogeneoustheindividualdumpingmarginsfound should not have such a wide spread. The complainantasked the Commission to review the dumping findings, particu-larly as far as Kobe and Yaka are concerned.
It has to be recalled that the dumping margin is determined
individually for each exporter by comparing its normal valuewith its export price as explained in recitals 10 to 24 of theprovisional duty Regulation.
Inthisrespect,theCommissioncanconfirmthattheexportprices
chargedbytheJapaneseexportersforcomparableproducttypesare, generally, for all exporters at a similar level. The invest-
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igation revealed however that the domestic prices of different
Japaneseproducersvarysignificantly,thusconstitutingtheprin-cipal reason for the variance in dumping margins established.
The complainant further argued, in this context, that the sales
channelsoftheJapaneseproducersontheirdomesticmarketaresimilar. The verification of the information submitted by theJapanese producers does not confirmthis argum ent.
Other arguments made by the complainant on the provisional
findings concerning the margins of dumping related to the coststructure, age of the workers, low productivity, the fact that nomanufacturerisleftinJapanformatchmachinesandtheutiliza-tion of old and inefficient machinery.
Consequently, as the evidence provided by the complainant in
support of its arguments is either merely circumstantial or notconfirmed by the findings made during the investigation, it isconcluded that the arguments have to be rejected.
(31)Afterhavingconsideredtheargumentsraisedbythepartiesandafterhavingmodified,whenappropriate,theprovisionalfindings,the definitive dumping margins for the cooperating producers/exporters, expressed as a percentage of the free-at-Community-frontier price are as follows:
—DaiwaTrading&IndustrialCo.Ltd 31,8%
—HarimaMatchCompanyCo.Ltd 63,5%—KobeMatchCo.Ltd 9,8%—YakaChemicalIndustryCo.Ltd 23,3%.
(32)Theapproachfollowedinrecital24ofheprovisionaldutyRegu-
lation for the assessment of the dumping margin applicable tonon-cooperating companies in Japan which is based on factsavailable and verified during the investigation is confirmed bythe Council. On that basis, it is considered that the highestdumpingmarginfound,i.e.63,5%withregardtoaproducerinJapan which had cooperated in the investigation, should alsoapply to non-cooperating producers in Japan.
E.COMMUNITY INDUSTRY
(33)The large majority of the Community producers of advertising
matches are members of FEFA (Féderation Européenne desFabricants d’allumettes), the European association who lodgedthecomplaintonbehalfofitsmembers.Theseproducers,locatedin France, Spain, Italy, Belgium, Portugal and United Kingdomare usually small and medium-sized enterprises with limitedresources. Consequently, even though they all supported thecomplaint, only the main producers, representing 78% of thetotal Community output of the product concerned and thus,clearlymeetingthecriteriasetforthinArticle4(5)ofthebasicRegulation,haveactivelycooperatedwiththeCommissioninthisinvestigation.
(34)AJapaneseexporterquestionedtheexclusionfromthepublishedprovisional determinations of a Community producer located inFrance, who replied to the Commission questionnaire.
(35)Thissituationisexplainedbythefactthatthisproducer,althoughsupporting the complaint, was not in a position to comply withthe requirements of the Commission for the on-the-spot invest-igation due to important internal difficulties. Therefore it wasdecided that this producer could not be considered as activelycooperatingintheproceedingandwasnotincludedinthedefini-tion of the Community industry.
(36)This decision is reflected in the contents of recital 25 of theprovisional duty Regulation which indicates that the term‘Communityindustry'shouldbeinterpretedasreferringtothoseCommunityproducersofthelikeproductwhosecollectiveoutput
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constitutesamajorproportionofthetotalCommunityproduction
whosupportedthecomplaintandwhoactivelycooperatedintheproceeding.
(37)Despitetheexplanationprovidedinrecital26oftheprovisionaldutyRegulation,oneimporterofJapaneseadvertisingmatchesinthe Community claimed that the main complainant Communityproducer should not be considered as part of the Communityindustryonthegroundsthatheimporteddirectlyorviaitsrelatedcompanies dumped advertising matches from Japan in volumesrepresentingfarmorethan4%ofitsownproduction.Insupportof its claima list of the subsidiaries of the above com plainantwhich allegedly imported the advertising matches from Japanwas supplied.
(38)TheCommissionre-examinedthelevelofimportsmadebythisCommunity producer and confirmed its provisional finding,namelythatthequantitiesimportedbythisproducerrepresentedaround 4% of its own total production of advertising matches.
(39)Another exporter claimed that two of the complainingCommunity producers were no longer producing advertisingmatches. Even though this exporter is referring to events whichallegedlyhappenedaftertheinvestigationperiod,whichthereforeshouldnormallynotbetakenintoaccount,ithastobenotedthatno indication exists that any of the complaining Communityproducers stopped manufacturing the product covered by thisinvestigation.
(40)In conclusion, the definition of the Community industry for thepurposes of the present proceeding and the provisional findingsmade by the Commission in this respect are hereby confirmed.
F.INJURY
1.Injury examination period and injury factors
(41)SomeexportersarguedthattheCommissionhadnotbeenconsis-
tentasfarastheinvestigationperiodfortheassessmentofinjuryis concerned.
(42)Theperiodcoveredbytheinjuryexaminationisthewholeperiodfrom1January1990to30June1994asmentionedinrecital7ofthe provisional duty Regulation. The ‘investigation period'fordumpinganalysiscoveredaone-yearperiodfrom1July1993to30 June 1994. The main injury indicators were assessed for thewholeinjuryexaminationperiod.However,whentheinformationsubmitted was not fully substantiated or not reliable and conse-quently could not guarantee an accurate analysis of a certaininjuryfactorwithintheinjuryexaminationperiod,theCommis-sion considered it appropriate to disregard the information andbased its conclusion on the available, substantiated information.
(43)As requested by some exporters, the Commission has furtherverified the information available in order to complete itsanalysis of certain injury factors, the results of which are givenbelow:
(a)Prices
(44)With reference to recital 45 of the provisional duty Regulation,
80%ofthesalesofbookandboxmatchestakentogethermadebytheCommunityindustryintheCommunitymarketweretakenintoaccountinthepricedevelopmentexercise.Itwasfoundthat,from1990uptotheinvestigationperiod,salespriceschargedbythe Community industry increased on average by 4%.
(45)A further analysis has been carried out separately for book andbox matches, the latter representing around 60% of the totalCommunityindustrysalesofmatchesandaround80%ofJapa-neseexporters’totalsalesintheCommunity.Onthatnewbasisitwasfoundthatfrom1990uptotheinvestigationperiodthesalesprices of box matches charged by the Community industry
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decreased by 2%, whereas the sales prices of book matches ofthis industry, representing the minority of Japanese sales in theCommunity, had increased by 10% during the same period.
(b)Production capacity and capacity utilization
(46)As requested by one Japanese exporter, the Commission,
notwithstanding the difficulties described in recital 44 of theprovisional duty Regulation, made the best possible estimate ofthe production capacity of advertising matches and relativecapacityutilizationoftheCommunityindustry.Itappearsthatonaverage the Community industry worked 222 days per year andtwo shifts per day. On this basis, whilst a reasonable averagecapacity utilization ratio would be around 75% for the type ofbusiness involved, the estimated capacity utilization of theCommunity industry from 1990 up to the investigation periodwas consistently low at around 56%, with a peak of 59% in1991.
(c)Cash flow
(47)Inadditiontotheprovisionalfindingsstatedinrecital51ofthe
provisional duty Regulation, the operating cash flow of theCommunity industry established at company-wide level for theadvertising division whose main activity is advertising matches,thatistheproductconcerned,decreasedby7%from1990uptothe investigation period.
(d)Profitability
(48)For1990,thefirstyearoftheinjuryperiodunderexamination,it
was found that the sales of the product concerned by theCommunityindustrywerestillprofitablewitharateofreturnonturnover of around 2,5%.
2.Segmentation of the market
(49)Following the publication of the provisional duty Regulation,
interestedpartiesdidnotobjecttotheprovisionalfindingsetoutin recital 36 of the provisional duty Regulation, namely thatadvertising matches were sold in the Community to separatecategoriesofcustomersdependingonthesizeoftheirorders.Infact it should be pointed out that the Japanese market had alsobeensimilarlycategorizedfortheestablishmentofdumping.Theinvestigation revealed that such categorization is a crucial issuegiven its impact on prices and costs.
(50)One Japanese exporter noted that the Community industry hadrequested the exclusion fromthe determ ination of injury of onecustomeronaccountoftheveryhighvolumeofpurchases,whichrendered it not directly comparable within the other customercategories. The Commission established that the customerconcernedwasnotableforthevolumeofitspurchases.However,these characteristics did not constitute a sufficient ground toexclude it fromthe overall injury assessm ent.
3.Cost allocation method
(51)Someexportersquestionedthecostallocationmethodappliedby
the Community industry and provisionally accepted by theCommission.Theyarguedthattheselling,generalandadminis-trative (SG & A) expenses which the Community industry allo-catedeitheraccordingtothenumberofordersoraccordingtothenumberofmatchboxesshouldinsteadbeallocatedonaturnoverbasis.
(52)Article 2 (11) of the basic Regulation specifies forthe exam-ination of dumping that, in general, all cost allocations shall bebased on available accounting data, normally allocated, wherenecessary, in proportion to the turnover for each product andmarketunderconsideration.Ananalogueapproachseemsappro-priate in this case.
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Thisapproachimpliesthattheappropriatenessofthecostalloca-tionmethodhastobeexaminedandappreciatedonthebasisoftheconsistencyinitsutilizationand,thatonlyintheabsenceofanappropriatemethod,shouldtheallocationofcostsbemadeonthe basis of turnover.
(53)After publication of the provisional duty Regulation, theCommissioncontinuedtoseektheinformationitdeemedneces-sary. In the light of the submissions received it was decided toconductaverydetailedon-the-spotinvestigationatthepremisesof the main Community producer which was part of theCommunity industry to verify yet again its cost allocationmethod.
This verification confirmed that the allocation method accepted
by the Commission at the provisional stage of the investigationwas consistently applied by the producer concerned and reason-ably reflected the costs associated with the production and thesaleoftheproductunderconsideration.Accordingly,thecontentsofrecitals49to50oftheprovisionaldutyRegulationareherebyconfirmed.
4.Undercutting and underselling
(54)SomeJapaneseexportersclaimedforpricecomparisonanallow-
ance for the difference in delivery time on the grounds that,particularly for the small size orders, delivery time affectedconsumer choice and thus price comparability. These exportersexplainedthatlongerdeliveryperiodsweretheresultofthefactthatmatchesfromJapanareusuallyshippedviaoceanfreighttotheCommunity,thussignificantlydecreasingthecostoftransportand lowering prices to clients who are willing to wait severalmonths for their orders. The Community industry time beingmuch shorter, Japanese exporters have no choice but to lowerprices to compensate for the longer delivery terms.
TheseJapaneseexportersconsiderthatlongerdeliverytimejusti-
fiedapricelowerthanthatchargedbytheCommunityindustryandestimatetheamountofthispricedifferenceataround5%,inlinewiththeaverageundercuttingfoundtoexist.Forthereasonsgiven in recital 29 this claimcould not be accepted.
(55)One Japanese exporter questioned its undercutting and under-selling margins on the grounds that they were calculated on thebasis of the prices of certain basic Community industry modelswhichwerenotidenticalinallrespectstothemodelsexportedbythe company concerned to the Community. It was alleged thatthree basic models of the Community industry were wood-stembookmatches,whereasthecorrespondingbookmatchesexportedby the company were made of carton paper (card-stem bookmatches). The former material being more expensive than thelatter,theexporterrequestedanadjustmentreflectingthemarketvalue of the difference in physical characteristics between theabovementioned models.
(56)In the absence of evidence to substantiate the exporter’s claim,the Commission has investigated this issue on the basis of theinformation available to it. It appeared that sales of comparablemodels of wood-stem and carton paper book matches were notnecessarilymadeatdifferentprices.Asanexample,forapartic-ular model, although there were 20% more wooden matches inthismodel,itssalespricewasthesameasthecard-stemmodel.ThisseemstoindicatethatanyadjustmenttotheJapanesepricesshould be made downwards rather than upwards. In conclusion,basedontheinformationavailableand,astheexporterconcerneddid not provide any evidence to substantiate its claim, theCommission could not take it into consideration.
(57)The same exporter questioned the methodology applied by theCommission in calculating the undercutting and undersellingamounts. It requested that the same methodology applied in
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another anti-dumping proceeding be applied to calculate itsmargins.
In the anti-dumping proceeding referred to by the exporter an
averagesalespriceandanaveragenon-injuriouspriceforallthedifferent models of the product under investigation were calcu-lated, whereas in the present proceeding the Commissioncompared prices on a model-per-model basis.
(58)Incaseswheretheproductconcernedisnotsoldunderanhomo-geneous shape or formand there are no dom estic standardmodelsdirectlycomparablewithimportedstandardmodelsofthelikeproduct,itisnecessarytodefinethemostappropriateunitofmeasurement in order to allow prices to be compared.
Asexplainedinrecitals36to41oftheprovisionaldutyRegula-
tion,standardbasicmodelsofadvertisingmatchesanddifferentcategories of customers were found to exist in the Communitymarket. They even represented the large majority of the tradeinvolved.Salespricesofthedifferentstandardmodelsofthelikeproduct sold by the Community industry could therefore becompared with those of the Japanese exporters on a model-per-model basis separately for the main categories of customers.
Asthemethodfollowedinthisproceedingisthemostaccurateto
determinetheundercuttingandundersellingmargins,theCouncilendorsestheCommission’srejectionoftherequestmadebytheexporter concerned to calculate their margins on the basis ofoverall weighted average prices.
5.Injury suffered by the Community industry
(59)While recognizing that the Community industry may have
suffered some injury, a number of Japanese exporters claimedthatthisinjurycouldnotbequalifiedasmaterial.Firstlybecauseonlysmallandmedium-sizedorders,representingalimitedshareof the whole advertising matches market, were affected by anegative return on sales. Secondly, because the Commissionclaimed material injury exclusively on the basis of the negativetrend of one single injury factor, namely profitability. Thirdly,because several factors were pointing to no injury at all.
(60)With reference to the first argument raised by these exporters,smallandmedium-sizedordersrepresentalargeshareofthetotalCommunitymarket,namelyaround59%intermsofvolumebutaround67%intermsofvalue.Itcanthereforebeconcludedthatthese segments are the main sources of revenue for theCommunityindustry.Accordingly,evenifthisindustrywasstillperformingwellinthelargeordersegment,itsabilitytocompetein this segment is dependent on maintaining overall financialviability.ThedeterioratingfinancialsituationoftheCommunityindustry, which was found to be negative overall during theinvestigationperiod,isthereforeathreattotheentireadvertisingmatches sector in the Community.
(61)Theaboveexportersindicatedthatsomeinjuryfactorspointedtoanoinjurysituationbutdidnotspecifytowhichindicatorstheywere referring. Furthermore the statement that the Commissionbased its conclusion on a single injury factor is not correct.
During the whole period under examination, it was found that
employmentintheadvertisingmatchessectordecreasedby13%,the share of the Community market held by the Communityindustry in terms of value decreased by about 10%, cash flowdecreasedby7%andoverallprofitabilitybecamenegativeafterhaving shown profits of 2,5% in 1990.
Furthermore, the fact must not be neglected that Community
industrypricesweredepressedforboxmatcheswhichrepresent60%oftotalsalesbythisindustryandthattheslightincreaseinoverallsalespricesformatchesof4,3%duringtheinvestigationperiod could not even cover the effects of inflation. This price
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suppressioncertainlyplayedasignificantroleinthedeterioratingfinancial situation of the Community industry.
(62)These exporters also supplied annual accounts of the maincomplaining Community producer and calculated a return oninvestment of 28,65% for this producer during the year 1995,that is after the end of the investigation period. According tothem, such a high return should demonstrate that the financialsituation of the Community producer concerned is excellent.
Tocalculatesuchareturnoninvestment,theseexportersapplied
theprofitofthelarge-sizedorders,asstatedinrecital50oftheprovisionaldutyRegulation,totheoverallturnoverasreportedintheannualaccountstheysupplied.Thentheyestablishedtheratiobetweenthisextrapolatedprofitovertheequityasreportedintheannual accounts.
(63)Itappearsthattheseexportershaveconfusedthereturnoninvest-ment with the return on equity ratio.
More importantly, the annual accounts they supplied were at a
consolidated level, and thus included a number of activities notcoveredbythepresentinvestigation.Byreferencetotheturnoverasreportedintheconsolidatedannualaccounts,thesalesvalueofthe large orders segment only represents 0,4%. Consequently,suchanestimateofthereturnoninvestmentmustbedisregardedand considered erroneous and misleading.
6.Conclusion on injury
(64)Onthebasisofthefactsandconsiderationsdevelopedaboveand
based on the deterioration of several injury indicators such asprofitability,marketshareinvalueterms,cashflowandemploy-ment, combined with low capacity utilization and the effects ofunsatisfactory price development, the Council confirms that theCommunity industry has suffered material injury in accordancewith Article 4 (1) of the basic Regulation.
G.CAUSATION OF INJURY
(65)TheCommissionhadprovisionallyexaminedtheextenttowhich
the material injury suffered by the Community industry wascausedbytheimpactofdumpedJapaneseimports,andwhetherotherfactorshadcausedorcontributedtothatinjuryinordertoensurethatinjurycausedbytheseotherfactorswasnotattributedtothedumpedimportsconcerned.Suchotherfactorsconsideredwere the evolution of consumption, competition from otherproducers in the Community, other imports, the exportperformanceoftheCommunityindustryandthebehaviourofthemain economic operators during the period under investigation.
(66)In spite of this detailed analysis on the causation of injury,several exporters claimed that no causal relationship was estab-lished between the alleged dumped imports and the materialinjury suffered by the Community industry. They stated thatJapaneseexportershadnotincreasedthevolumeoftheirshareoftheCommunitymarketalthoughtheirimportpriceshadincreasedby 40%. Furthermore they could not understand why in thelarge-sizedorderssegmentwherethehighestundercuttingmarginby Japanese exporters was found, no causal effects seemed toexist. On the contrary a profitable situation had emerged.
(67)Itshouldbeborneinmindhoweverasmentionedinrecitals58to62 of the provisional duty Regulation that low-priced dumpedJapanese imports increased their Community market share invaluetermsby24%whereastheCommunityindustrylost10%of this share. From1990 up to the investigation period, theCommunity industry prices were constantly suppressed anddespite a significant price increase Japanese products stillundercuttheformerpricesbyanaveragemarginof6,2%.Overtheyearsthissituationhascausedsignificantdifficultiesforthe
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Communityindustrywhoseprofitabilitybecamenegativeduring
the investigation period.
An additional link between the negative situation fo the
Community industry and the dumped Japanese imports wasestablished through the fact that the return on sales of theCommunity industry was found to be significantly worse in thesales segments where Japanese products were mainly present,that is in the small and medium-sized order segments.
(68)TheCommissionhasfurtheranalysedseparatelythemarketshareofadvertisingmatchesforeachcategoryofcustomerdependingontheordersizeintermsofvolumeandvalueasshowninthetable. This table was established for the investigation period ondumping(1July1993to30June1994)onthebasisofmorethan80%ofsalesmadebytheCommunityindustryandaround80%of Japanese sales in the Community market:
Japaneseexporters Communityindustry Totalmarketshare
Ordersize
volumevaluevolumevaluevolumevalue
Small 14%16,5%11%16,5%25% 33%
Medium 14%13%20%21%34% 34%
Large 4%3%37%30%41%33%
(69)Thisanalysisshowsthatwhilethevolumeofthemarketforlargeorders represents around 41% of the total advertising matchesmarket, the share held by the Community industry for largeordersamountstonearly10timesthatofJapaneseexporters.Thelimited volume sold by the Japanese exporters in this segmentexplains why limited effects were found.
(70)As to the other two segments of the markets, they representaround60%ofthevolumeandaround67%ofthevalueoftheoverall market share, thus demonstrating that these are the keysegments in the advertising matches business.
(71)It follows that low-priced dumped Japanese imports are, there-fore,targetingthesekeysegmentsoftheCommunitymarket,thevolume of their share of the market in these segments (47%)being comparable with that of the Community industry (53%).ConsequentlythelargequantitiessoldbytheJapaneseexporterscombined with their constant price pressure since 1990 in suchkeysegmentsofthemarkethasclearlycausedmaterialinjurytothe Community industry.
(72)As far as price development is concerned, and as alreadymentioned in recital 45 above, sales prices of boxes and bookmatches of the Community industry developed differently from1990 up to the investigation period. Prices of box matchesdecreased by 2% whereas prices of book matches increased by10%.ConsideringthatboxmatchesrepresentthelargemajorityofJapanesesales(around80%)duringtheaboveperiod,thelinkbetweenthenegativepricedevelopmentfortheboxmatchesandthe presence in the Community market of dumped Japaneseimports can clearly be established.
(73)Inconclusion,basedonthefindingsasexplainedanddevelopedin the recitals above, the Council confirms that low-priceddumped imports from Japan, taken in isolation, have causedmaterial injury to the Community industry.
H.COMMUNITY INTEREST
(74)InitsprovisionaldutyRegulationtheCommissionindicatedwhy
theCommunityinterestcallsforintervention.InthisrespectitisrecalledthattheotherproducersintheCommunityaresmallandmedium-sized enterprises representing up to 22% of the totalCommunity production of the product concerned. The fact that
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the large majority (90%) of these producers has consistently
supportedthecomplaintshowsthattheyareoftheopinionthatitisintheirinteresttorestorefairtradepracticesintheCommunitymarket with the imposition of anti-dumping measures.
(75)As to the competition law investigations into the mainCommunityproducerintheCommunitymarket,theCommissionis aware of the fact that a complaint was lodged with thecompetent services of the Commission, alleging that SwedishMatch abused and was abusing its dominant position by prac-tising a policy of acquisitions and of predatory pricing. Thatcomplaint has been dismissed, without objections from thecomplainant, because no evidence was found or had beensupplied of the existence of the alleged abuses.
(76)As to the allegation according to which the main Communityproducermightadoptorhasalreadyadoptedalong-termstrategyofsellingataloss,whileconfirmingwhatitstatedatrecital94oftheprovisionaldutyRegulationitmaybeaddedthattheallega-tionsforwardedinthisrespectwerebasedonafewpricequota-tions referring to a very short period of time subsequent to theinvestigation period. These allegations cannot be taken intoconsideration because the number of quotations is very limited(three) and refers to a period of time subsequent to the invest-igation period.
(77)Insummary,theCouncil,afteranappreciationofallthevariousinterests, taken as a whole, and for the reasons given in theprovisional duty Regulation concludes that, on balance, it is inthe Community interest to impose definitive measures.
I.ANTI-DUMPING MEASURES
(78)Basedontheaboveconclusionsondumping,injury,causallink
and Community interest, it was considered what level and formthe anti-dumping measures should take in order to remove thetrade-distortingeffectsofinjuriousdumpingandtorestoreeffec-tive competitive conditions in the Community market.
(79)After the publication of the provisional duty Regulation theCommission became aware that the level of trade adjustmentmadeinestablishingtheinjuryeliminationlevelhadbeenappliedtotheunrelatedimporters’resaleprices,whereassuchanadjust-mentshouldbeappliedtoJapaneseexporters’salespricesintheCommunity. Accordingly the injury margins have been recalcu-lated.
(80)Since the injury margin, that is the level of prices at which theinjuriouseffectsofthedumpedimportswouldberemoved,waslowerthanthedumpingmarginfoundforthreeoftheexportersconcerned in the investigation, the injury margin was used inorder to determine the level of the measures to be applied tothese exporters.
Foroneexporterthedumpingmargin,whichwaslowerthanthe
injurymarginfound,wasusedinordertodeterminethelevelofthe applicable measures.
(81)Ontheabovebasis,definitiveduties,intheformof ad valorem
duties, should be imposed.
(82)Thecomplainantclaimedthat,inordertoavoidthepossibilityofcircumventionoftheduties,thesamedutyshouldbeimposedonallthecooperating,exportingproducers.Thisclaimwasbasedona report of a Japanese economic research institute alleging theexistenceofaclosecooperationondomesticandexportpricesofthe Japanese industry.
TheinformationcollectedbytheCommissionandverifiedonthe
spotdidnotprovideanyevidencewhatsoeverofacommonpricestrategy by the Japanese industry, at least as far as domesticprices,andthereforethenormalvalue,areconcerned(seerecitals22and23).Furthermore,theimpositionofthesamedutyonallthe exporting producers, regardless of their different normal
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values, would constitute arbitrary treatment that could not bejsutified by the mere, unsubstantiated possibility of circumven-tion of the duties,
This claimis therefore rejected.
J.COLLECTION OF THE PROVISIONAL DUTIES
(83)Inviewofthemagnitudeofthedumpingmarginsfoundforthe
exporting producers and in the light of the seriousness of theinjurycausedtotheCommunityindustry,itisconsideredneces-sary that the amounts secured by way of provisional anti-dumpingdutiesshouldbedefinitivelycollectedatthelevelofthedefinitive duties,
HAS ADOPTED THIS REGULATION:
Article 1
1. Definitiveanti-dumpingdutiesareherebyimposedonimportsof
advertisingmatchesoriginatinginJapan.Theproductasdescribedfallswithin CN code ex 36050000 (Taric code 36050000*10).
For the purposes of this Regulation, advertising matches are matches
incorporatingadvertisingmatterotherthanorinadditiontothelogoordetails of the match manufacturer.
2. ForthepurposeofthisRegulation,therateofdutyapplicableto
the net, free-at-Community-frontier price, before duty shall be 43,2%(Taric additional code 8900) with the exception of imports manufac-turedandexportedbythefollowingcompanies,whichshallbesubjectto the following rates of duty:
(a) 27,8% for the products manufactured and exported by Daiwa
Trading & Industrial Match Co. Ltd (Taric additional code 8022);
(b) 9,8%fortheproductsmanufacturedandexportedbyKobeMatch
Co. Ltd (Taric additional code 8023);
(c) 10,3%fortheproductsmanufacturedandexportedby ►
C1Yaka
Chemical Industry Co. Ltd ◄(Taric additional code 8024).
3. Unless otherwise specified, the provisions in force concerning
customs duties shall apply.
Article 2
Theamountsecuredbywayofprovisionalanti-dumpingdutypursuant
to Regulation (EC) No 1092/97 shall be definitively collected at theduty rate definitively imposed.
Amountssecuredinexcessofthedefinitiverateofanti-dumpingshall
be released.
Article 3
ThisRegulationshallenterintoforceonthedayfollowingitspublica-
tion in the Official Journal of the European Communities .
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicablein
all Member States.