1999R0397 — EN — 27.05.2000 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILREGULATION(EC)No397/1999
of22February1999
imposing a definitive anti-dumping duty on imports of bicycles originating in Taiwan and
collecting definitively theprovisionaldutyimposed
(OJ L 49, 25.2.1999, p. 1)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 1099/2000 of 22 May 2000 L 125 1 26.5.2000
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COUNCILREGULATION(EC)No397/1999
of22February1999
imposing a definitive anti-dumping duty on imports of bicycles
originating in Taiwan and collecting definitively the provisional
dutyimposed
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December
1995 on protection against dumped imports from countries notmembersof the European Community(
1) and in particular Article 9(4)
thereof,
Having regard to the proposal submitted by the Commission after
consulting the Advisory Committee,
Whereas:
A.PROVISIONALMEASURES
(1)By Commission Regulation (EC) No 1833/98(2) (hereinafter
referred to as ‘the Provisional Duty Regulation’), provisionalanti-dumping dutieswere impos ed on importsinto the Commu-
nity of bicyclesfalling within CN code 8712 00 10, 8712 00 30,
8712 00 80 and originating in Taiwan.
B.SUBSEQUENTPROCEDURE
(2)Following the imposition of provisional antidumping duties,
several interested parties submitted comments in writing.
(3)The parties who so requested were granted an opportunity to beheard by the Commission.
(4)The Commission continued to seek and verify all the informa-
tion it deemed necessary for the purpose of its definitive
findings. A verification visit was carried out at the premises ofthe following importer not related to any Taiwanese exportingproducer and located in the Community:
— Bikeurope BV, Utrecht, The Netherlands.
(5)All parties were informed of the essential facts and considera-
tionson the bas isof which it wasintended to recommend theimposition of definitive anti-dumping duties and the definitivecollection of amounts secured by way of provisional duties.They were also granted a period within which to make represen-tations subsequent to this disclosure.
(6)The oral and written commentss ubmitted by the partieswereconsidered, and, where deemed appropriate, the definitive find-
ingshave been changed accordingly.
C.PRODUCTCONCERNEDANDLIKEPRODUCT
(7)Since no commentswith regard to the definition of the product
concerned and the like product were received, the contentsof
recitals13 to 19 of the Provis ional Duty Regulation are herebyconfirmed.
D.NEWEXPORTINGPRODUCERSINTAIWAN
(8)Asexplained in the Provis ional Duty Regulation, in view of the
large number of exporting producers in Taiwan, the Commissiondecided to apply sampling techniques in accordance with Article17 of Regulation (EC) No 384/96 (hereafter referred to as‘the1999R0397 — EN — 27.05.2000 — 001.001 — 2
(1) OJ L 56, 6. 3. 1996, p. 1. Regulation aslas t amended by Regulation (EC)
No 905/98 (OJ L 128, 30. 4. 1998, p. 18).
(2) OJ L 238, 26. 8. 1998, p. 10.
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Basic Regulation’). No arguments have been advanced
concerning the selection of the sample of exporting producerswhich was made with the consent of the association representing
them.
One month before the adoption of provisional measures, a
number of exporting producersin Taiwan made thems elvesknown and requested new exporting producer status. Followingthe adoption of provisional measures the Commission, by meansof a special questionnaire, examined whether these companies
did not export the product concerned to the Community during
the investigation period, whether they had started to export tothe Community after thisperiod or whether they had enteredinto an irrevocable contractual obligation to export a significantquantity to the Community, and whether they were not related toany of the exportersor producersin Taiwan which are s ubject to
the anti-dumping measures on the product concerned. The
exporting producerswhich have s hown that they fulfil the above-mentioned criteria were considered as new exporting producersand should be granted the same treatment, in terms of definitivemeasures, as the cooperating exporting producers not included in
the sample, i.e. an anti-dumping duty calculated in accordance
with Article 9(6) of the Basic Regulation.
(9)The same treatment should be granted to any other newexporting producer who, following the adoption of definitive
measures, submits sufficient evidence showing that it fulfils the
abovementioned criteria.
E.DUMPING
1.Normalvalue
1.Methodology for the construction of normal value
(10)Asno argumentshave been advanced concerning the metho-
dology used for the determination of constructed normal valuefollowing the adoption of provisional measures, the findings asset out in recitals 27 to 31 of the Provisional Duty Regulationare hereby confirmed.
2.Cost of production
(11)Following the adoption of provisional measures, one company
contested the use of the manufacturing cost as set out in itsown accounting recordsfor the determination of cons tructednormal value. It claimed that the manufacturing cost reported in
its response to the questionnaire should be used instead because
this was more accurate. It also claimed that since certaincustoms duties incurred for the product when sold domesticallywere allocated together with the manufacturing overheadson allproductsin itsaccounting records , a different allocation s houldbe made for the dumping calculations.
(12)During the on-the-spot investigation it was found that thecompany'saccounting recordsprovided a much more detailedcost of manufacturing per model than that requested in the ques-tionnaire. The investigation also revealed that there was a
significant discrepancy between the manufacturing cost reported
in the response to the questionnaire and that in the company'saccounting records. Overall, the company underestimated in itsresponse to the questionnaire the manufacturing cost of themodelsexported to the Community and overes timated the manu-
facturing cost of the domestic models.
The company did not provide any reason why the cost reported
in the response to the questionnaire reflected more reasonablythe cost associated with the production of the product than thecost in its accounting records. With regard to the allocation ofcertain customs duties together with the manufacturing over-heads, the company was not able to explain, on the basis of1999R0397 — EN — 27.05.2000 — 001.001 — 3
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information available from the reply to the Commission's ques-
tionnaire and the on-the-spot investigation, how those customsdutieswere treated in itsaccountsand how they were allocated
to the different models. Therefore it was concluded that the per
model manufacturing cost obtained from the company'saccounting records should be used for the construction of normalvalue.
(13)Another company claimed that in constructing normal value the
Commission should not have rejected the allocation of direct
labour and manufacturing overheadsmade in the ques tionnaireresponse. It argued that since it had no precise allocation methodfor these cost items, it was compelled to create such an alloca-tion method for the dumping investigation. However, the
investigation revealed that the company had historically utilised
an allocation method for direct labour and manufacturing over-heads. It was also found that the ad hoc allocation used in thequestionnaire response systematically raised the cost of highmanufacturing cost models and reduced the cost of low manufac-turing cost models as compared to the cost allocation historically
utilised in its accounting records. According to this ad hoc allo-
cation method, direct labour and manufacturing overheadswereallocated on the basis of various factors, e.g. the size or type ofparts used. However, the company did not show that these adhoc allocation factorsprovided a more appropriate allocation ofdirect labour and manufacturing overheadsascompared to the
historically used allocation. It was therefore considered that there
is no reason to deviate from the allocation method historicallyutilised by the company and that the latter method should beused in calculating the manufacturing cost for the constructionof normal value.
2.Exportprice
(14)Since no argumentshave been advanced concerning the determi-
nation of export price following the adoption of provisional
measures, the findings as set out in the Provisional Duty Regula-
tion are hereby confirmed.
3.Comparison
(15)One exporting producer claimed that certain paymentsmade to a
related company in order to prevent it from becoming insolvent
were wrongly deducted as commissions from the export price.
(16)The on-the-spot investigation revealed that the exportingproducer in question had actually paid certain commissionsdirectly linked to specific export sales to the Community which
have not been reported in the response to the questionnaire. In
addition, it should be noted that the exporting producer had notdisclosed in the response to the questionnaire the existence ofthe related company which received the commissions and wasinvolved in export sales to the Community although such infor-mation was explicitly requested in the questionnaire.
Consequently, the claim was rejected and these commissions
were deducted from the relevant export prices.
(17)No other argumentshave been advanced concerning the adjus t-ments made to ensure a fair comparison as set out in theProvisional Duty Regulation and the findings as set out in the
Provisional Duty Regulation are therefore confirmed.
4.Dumpingmargins
1.Methodology
(18)Asexplained in the Provis ional Duty Regulation, the weighted
average constructed normal value by model was compared onan ex factory basis with the weighted average export price bymodel. Since no change wasmade to the dumping calculations ,1999R0397 — EN — 27.05.2000 — 001.001 — 4
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the provisional dumping margins are hereby confirmed as
follows.
2.Dumping margins for companies in the sample
(19)The comparison of the normal value and the export price duly
adjusted showed the existence of dumping in respect of all
companieswhich were included in the s ample. The dumpingmargins of the various models established vary and, therefore,the Commission calculated a weighted average dumping marginfor each exporting producer. In view of the significant differ-encesin export pricesof the variousmodels , the weighting was
done on the basis of their export quantity. The definitive
dumping margins expressed as a percentage of the cif importpricesat the Community frontier duty unpaid are the following:
— Fritz Jou Manufacturing Co. Ltd: 10,2 %
— Giant Manufacturing Co. Ltd: 2,4 %— Merida Industry Co. Ltd: 2,5 %— Ming Cycle Ind. Co. Ltd: 2,5 %— Overlord Industries Corp.: 18,2 %
3.Dumping margin for cooperating companies not in the
sample
(20)Cooperating companies not selected in the sample were, inaccordance with Article 9(6) of the Basic Regulation, attributed
the average dumping margin of the companiesin the s ample,
weighted on the basis of their export volume to the Community.Expressed as a percentage of the cif import price at the Commu-nity frontier duty unpaid, thisdefinitive dumping margin is5,4 %.
4.Dumping margin for non-cooperating companies
(21)For non-cooperating companiesa dumping margin wasdeter-
mined on the basis of the facts available in accordance with
Article 18 of the Basic Regulation. Since the level of coopera-tion was high it is considered appropriate to set the dumpingmargin for non-cooperating companiesat the level of the highes tdumping margin established for a company in the sample.Indeed, it would constitute a bonus for non-cooperation and
encourage circumvention to assume that the dumping margin
attributable to non-cooperating exporting producersislowerthan that found for a cooperating exporting producer.
This definitive dumping margin expressed as a percentage of the
cif import price at the Community frontier duty unpaid, isthere-fore 18,2 %.
F.DEFINITIONOFTHECOMMUNITYINDUSTRY,SAMPLING
(22)The Taiwanese Bicycle Exporters' Association (hereafter referred
to as ‘TBEA’) and the European Bicycle Importers' Association
(hereafter referred to as‘EBIA’) indicated that only nine
European producers were included in the sample and that sixout of those nine companies are members of larger groups ofbicycle manufacturers. However, only four of them have coop-erated satisfactorily in the investigation. They remarked that
small independent manufacturers of bicycles had either declined
to support the investigation or had offered little cooperation. Inview of the foregoing, TBEA and EBIA claimed that the compa-nies sampled for the injury determinations are not representativeof the Community industry but only represent the interests oflarge conglomerates.1999R0397 — EN — 27.05.2000 — 001.001 — 5
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(23)As far as representativeness of the Community industry or the
support from the industry in the Community are concerned, in
accordance with the provisions of Articles 4(1) and 5(4) of theBasic Regulation, it was established at the provisional stage, asmentioned in recital 43 of the Provisional Duty Regulation, thatproducersrepres enting asmuch as60 % of Community produc-tion expressly supported the complaint and were thus in favour
of the initiation of the present investigation.
No producers, either large or small, expressed any opposition to
the investigation. Consequently, there cannot be any doubt as tothe position of all the Community producers as regards theinitiation of thisinves tigation.
(24)In accordance with the provisions of Article 17 of the BasicRegulation and as set out in recitals 46 and 47 of the ProvisionalDuty Regulation the sample of Community producers chosenwas representative in all respects, covering in particular a repre-sentative variety of company sizes, integration of production and
product mix, aswell asa large volume of production. EBIA and
TBEA, in their above submission, have not shown that thesample chosen by this methodology is not appropriate.
(25)Finally, it should also be pointed out that all the Communityproducers included in the sample replied to the Commission'squestionnaire and to the relevant deficiency letters sent by theCommission. They also fully cooperated during the on-the-spotinvestigations. Consequently, the allegation that some Commu-nity producers did not cooperate satisfactorily in the
investigation is unfounded.
(26)Based on the above facts and considerations, the Council
confirmsthe contentsof recital 45 of the Provis ional Duty Regu-
lation as far as representativeness of the Community industry is
concerned. It is also confirmed that the sample, formed by thenine companies representing 40 % of the total Community indus-try's volume of operations, is representative of the Communityindustry.
G.INJURY
1.Methodologyforthedeterminationofinjury
(27)Asindicated in recital 48 of the Provis ional Duty Regulation, the
injury situation of the Community industry has been assessed onthe basis of two categories of information. The first category ofinformation relatesto global injury indicatorspertaining to theCommunity industry, such as, production, capacity and capacityutilisation, stocks, sales, market share, investments and employ-
ment. The second category of information is based on certain
performance injury indicatorsof the Community indus try, inparticular profitability, prices, price evolution and price under-cutting, collected from the sampled Community producers.
1.Global injury indicators
(28)On the basis of a variety of documents such as press releases,
extracts from the non-confidential replies to the Commission'squestionnaire and annual reports of European groups such asMonark, Atag and Derby to which some sampled producersbelong, TBEA and EBIA claimed that these major groups havemade significant improvements in terms of turnover, production
volume and profitability. Thiswasin contradiction with the
injury finding reached at the provisional stage.
(29)In this respect, it should be underlined that TBEA and EBIA, in
support of the alleged increases in production volume, turnover
or profitability, mainly provided information at a group leveland not specifically for the product concerned. It is consideredthat thiscannot invalidate the provis ional findingsmade on theglobal injury indicatorsfor the whole Community indus try whichare based on the situation related to the product concerned and1999R0397 — EN — 27.05.2000 — 001.001 — 6
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reflect the situation of all individual companies included in the
groups.
Indeed, the abovementioned groups are also involved in business
activities other than bicycles. The share of the bicycle business
in the overall activity variesbetween approximately 27 % to70 % depending on the group. It isals o recalled that the totalshare of these three groups in the Community bicycle marketwas established at around 28 % during the investigation period.
Furthermore, even though acquisitions may result in an overall
increase in production and sales value as well as an increase inturnover within a whole group, especially when economic indi-cators are considered regardless of the inclusion of a newcompany in the group, they are nevertheless compensated forby the demise of independent companies. This assumption does
not contradict the fact that individual companieswithin the
group and the group itself may have decreased production, salesvolume, turnover and profit throughout the whole period underinvestigation.
On this basis, the TBEA's and EBIA's conclusion that the overall
performance of these groups had improved in terms of their
operationsin relation to the product concerned cannot beaccepted.
(30)Since the information supplied by TBEA and EBIA is neitherconsistent nor provides adequate evidence to invalidate or putinto question the detailed analysis made by the Commission inrecitals58 to 73 of the Provis ional Duty Regulation, the findingsset out in these recitals are therefore definitely confirmed.
2.Performance-related injury indicators
(31)TBEA and EBIA argued that the Commission should have
assessed the situation of the Community industry on the basisof an investigation of the entire groups to which sampled compa-nies respectively belong instead of collecting information from
some individual members in the groups. They claimed that the
selection of one or two companies within a group does not allowan overall analysis of the group and prevents taking into accountthe impact of sales within the group, in other words the salesbetween related parties. The injury determinations were therefore
flawed according to TBEA and EBIA.
(32)Recital 5 of the Provisional Duty Regulation stated that in view
of the large number of Community producers expressly
supporting the complaint, sampling was used and a representa-
tive sample of complainant Community producers, as set out inrecitals 46 to 47 of the Provisional Duty Regulation, was inves-tigated.
Investigating entire groups instead of individual companies
within the groups, as suggested by TBEA and EBIA, however,
would have required the investigation of a significantly larger
number of companiesthan the nine currently inves tigated andwould thus have been contrary to the very reason why samplingin accordance with Article 17 of the Basic Regulation was usedin the current investigation.
(33)In any event, the current investigation has been conducted in away ensuring that all extraordinary, non-operative or financialitems or subsidiary activities which were not directly linked to
the product concerned were disregarded when assessing the indi-
vidual factors which led to the provisional conclusions on injury.Such an approach excluded the possibility of transferringrevenue from one company to another within the group or allo-cating excessive general costs to the bicycle activity.
(34)In addition, it wasens ured that only indicatorsreflecting anarm'slength relations hip between companiesbelonging to thesame group were used to establish the performance-related injuryindicatorsof the Community indus try.1999R0397 — EN — 27.05.2000 — 001.001 — 7
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(35)Consequently, there is no ground for TBEA and EBIA to
conclude that the injury determinationswere flawed. The provi-
sional findings made for all performance-related injury indicatorsare thusconfirmed.
2.Price undercuttingdeterminations
(36)TBEA and EBIA contested the methodology (recitals 54 to 57 of
the Provisional Duty Regulation) used by the Commission when
determining the provisional undercutting margins. They claimedthat these margins were inflated because the Commission did notoffset any negative amount with the positive amount by whichthe Taiwanese exporters' prices undercut those of the Commu-
nity industry. According to them the actual undercutting margin
and the level of competition could only be measured byincluding in the calculationsthe amount by which the Commu-nity industry prices undercut those of the Taiwanese exporters.
(37)In the undercutting methodology used by the Commission, theweighted average net sales prices of the dumped imported
bicyclesfrom Taiwan were compared, on a model-by-model
basis, with the average net sales price of bicycles produced andsold by the Community industry in the Community market.Therefore, contrary to the claim made by TBEA and EBIA, thismethodology allowed the amount by which the Taiwanese priceof one particular model exceeded that of the Community
industry price to be taken into account on a transaction-by-trans-
action basis.
3.Profitability oftheCommunityindustry
(38)TBEA and EBIA considered that the findings of the Commission
in recital 70 of the Provisional Duty Regulation, i.e. that profit-
ability has become negative since 1995 despite efforts made bythe sampled Community producers to restructure and reducecosts, are not consistent with its findings on the evolution ofprices which show a steady positive trend.
(39)Asindicated in recital 83 of the Provis ional Duty Regulation, it
should be noted that not all prices of the individual models
produced and sold by the Community industry had a positivetrend or increased during the whole period under examination.On the contrary for mountain bikes(MTB), ass tated in recital83 of the Provisional Duty Regulation, prices decreased by upto 12 % in certain Member Stateswhere Taiwanes e bicycles
are mainly sold, namely the United Kingdom (UK), France and
Germany. Furthermore, it cannot be concluded that the overalltrend followed for prices and costs should automatically applyto profitability. To reach such a conclusion, an analysis, takinginto account other economic factors, besides price evolution, isrequired. In the present context, these factors are economy of
scale, cost of production per unit and product mix.
(40)Indeed, as stated in recitals 65 and 66 of the Provisional Duty
Regulation, between 1994 up to the investigation period, thevolume of sales made by the Community industry to unrelatedcustomers in the Community market decreased by 22 % (about1,8 million units) and sales value decreased by 14 % resulting,
on the one hand, in a significant loss in the economy of scale
and increased unit production costs. On the other hand, eventhough certain costs could be reduced as a result of restructuring,taking into account the above two trends, in the present case anincrease in the unit cost of production (COP) for most models of
bicycleshasoccurred. Thistendency hasbeen reinforced by the
fact that, asmentioned in recital 67 of the Provis ional DutyRegulation, the Community industry has produced higher rangebicycles involving higher production costs and higher salesprices. Overall, the impact of the above situation on profitabilitywasnegative.1999R0397 — EN — 27.05.2000 — 001.001 — 8
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(41)Given the bad situation in the Community market and the pres-
sure exerted on sales prices, the reduction of indirect costs and
sales price increases were not high enough to compensate forthe direct costs and COP per unit increases.
(42)The evolution of the above economic factorsexplainswhy theCommunity industry's profitability remained negative throughoutthe whole period under examination despite increases in salesprices and certain reductions in costs. The contents of recital 70
of the Provisional Duty Regulation are hereby confirmed.
4.Conclusiononinjury
(43)The findings which led to the provisional conclusion that the
situation of the Community industry deteriorated throughout thewhole period under examination have been reviewed in the lightof each claim made by TBEA and EBIA. Thisreview confirmedthat all the injury indicatorsof the Community indus try, namely
production (− 20 %), capacity (− 18 %) and capacity utilisation
(− 3 %), sales in terms of volume (− 22 %) and value (− 14 %),market share in terms of volume (− 7 %) and value (− 4 %),negative profitability and employment (− 15 %), provisionallyestablished were correct. These findings are therefore confirmed
as well as the conclusion that the Community industry suffered
material injury within the meaning of Article 3 of the BasicRegulation.
On the basis of the above facts and considerations, the provi-
sional findings, as well as the provisional conclusions on injury
asindicated in recitals74 to 77 of the Provis ional Duty Regula-tion, are hereby confirmed.
H.CAUSATIONOFINJURY
1.EffectofdumpedimportsontheCommunityindustry
1.Volume of imports from Taiwan
(44)TBEA and EBIA claimed that a significant number of bicycles
imported from Taiwan were not in direct competition withbicycles manufactured by the Community industry since not allbicyclesimported from Taiwan were compared with Communityproduced onesin the price undercutting exercis e and therefore
could not have negatively affected the Community industry.
(45)In addition, according to TBEA and EBIA, the Community
industry did not suffer injury caused by bicycles imported fromTaiwan. Although the volume of importsof bicyclesfromTaiwan increased during the period under examination, theincrease was very moderate and, in fact, it did not even compen-sate for the decline in total imports following the imposition of
anti-dumping measures against imports from the People's
Republic of China, Malaysia, Indonesia and Thailand. Between1994 and the investigation period, imports from countries otherthan Taiwan decreased by approximately 1 000 000 unitswhereasin the s ame period of time importsfrom Taiwan only
increased by 550 000 units. They thus concluded that import
pressure on the Community was in fact significantly reducedduring the period under examination.
(46)Asregardsthe firs t argument, the fact that not all modelsof theproduct under investigation were compared in the context of theexamination of price undercutting cannot lead to the conclusionthat these models are not comparable or not in competition in
the Community market. Indeed, the investigation has shown
that despite the high number of possible variations in bicyclesavailable in both the Taiwanese and the Community market,they all have the same basic physical and technical characteris-tics and uses and that all bicycles should therefore be regardedasbeing one s ingle product.1999R0397 — EN — 27.05.2000 — 001.001 — 9
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(47)Asregardsthe s econd argument above, related to the impact of
high import volumesfrom Taiwan, it wasfound in recital 79 of
the Provisional Duty Regulation that Taiwan was by far the mainexporter of bicyclesto the Community with a s hare of 55 % ofimportsduring the inves tigation period. That performance wasachieved despite the fact that the Community market had conti-nually shrunk since 1994: the market size measured in units
decreased by 16 %. Whereas the Community industry lost sales
volume (− 22 %), asdid other operatorsin the Communitymarket, only Taiwanese exporters continued to increase theirimport volume (+ 25 %) at a time during which their sales pricessteadily decreased (− 19 %) between 1995 and 1996. Whereas
the Community industry lost around 1,8 million units in sales
volume, Taiwanese imports increased by 300 000 units, namely55 % of the overall increase during the whole period underexamination. Under these circumstances, and bearing in mindthe findings specified in recital 81 of the Provisional Duty Regu-lation, low-priced dumped Taiwanese bicycles negatively
affected Community industry.
2.Evolution of market share
(48)According to TBEA and EBIA, the evolution of the market share
of the complainant and non-complainant Community producers
indicates the absence of detrimental effects caused by Taiwaneseimports. In 1994, all Community producers held a 70,4 % shareof the Community market. During the investigation period thisshare, slightly reduced by 2 percentage points, was still as high
as68 %. Thisreduction however allegedly hidesthe fact that the
market share held by individual Community producers hadimproved. Asindicated in recital 58 of the Provis ional DutyRegulation several companies went bankrupt or closed downduring the period under consideration, thereby reducing thenumber of Community producers. Since the remaining producers
hold a market share comparable to that held by the arguably
more numerousproducersback in 1994, TBEA and EBIAconcluded that these remaining producers have allegedlyincreased their own market share at the expense of otherEuropean manufacturers.
(49)The focuson market s hare asadvocated by TBEA and EBIAblurs in this particular case the results of a proper analysis. As
far asthe Community producersare concerned, it wasfound in
recital 71 of the Provisional Duty Regulation that between 1994up to the investigation period, the Community industry lost 7 %of itss hare in the market in termsof volume and 4 % of themarket in value. The loss in sales volume was around 1,8 millionunitsduring that period of time. The market s hare held by the
other Community producers, namely those not included in the
definition of the Community industry, increased both in termsof volume (+ 2 %) and in termsof value (+ 5 %). However,they also lost considerable sales volume (− 600 000 units) duringthat period.
In the meantime, the market share of Taiwanese exporters in
terms of volume increased by 50 % or by 5,8 percentage points,namely three timesmore than the other Community producers .Moreover, they managed to increase their sales volume by550 000 units. Consequently the above findings clearly contra-dict the assumptions made by TBEA and EBIA on market
share. From the above analysis it can be concluded in fact that
the spectacular increase in the market share held by Taiwaneseexporterswasmade at the expens e of both complaining andnon-complaining Community manufacturers.
3.Price evolution of the Community industry
(50)TBEA and EBIA noted that the pricesof bicycless old by the
Community industry had developed positively during the wholeperiod under examination with pricesincreas ing by 6 % between1999R0397 — EN — 27.05.2000 — 001.001 — 10
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1994 and the investigation period. Prices increased by 11 %
between 1995 and 1996 and by a further 2 % between 1996and the investigation period.
(51)The overall price development of the Community industry wasindeed positive between 1994 and the investigation period. Asstated in recital 59 of the Provisional Duty Regulation, however,such a trend resulted from the fact that the Community industrychanged itsproduct mix and concentrated on higher rangeproducts. Nevertheless, the investigation has also shown that as
price increases did not allow that industry to cover its costs of
production, profitability hasremained negative s ince 1995. Itwas also established in recital 83 of the Provisional Duty Regu-lation that price evolution had also shown negative trends,depending on the model and pressure from unfair competition
from low-priced dumped Taiwanese imports. The average price
for homogeneous MTB models, namely MTBs whose compo-nents did not change much, showed a decrease of up to 12 %from 1994 to the investigation period, depending on the Commu-nity market.
(52)Given the fact that 60 % of Taiwanese imports were mainly
concentrated in the low-end range of the MTB segment, where
Community prices were mainly depressed, it is considered thatthe pricing behaviour of the Taiwanese exporters negativelyaffected the Community industry.
2.Evolutionofconsumption
(53)According to TBEA and EBIA, the negative development of
consumption is one of the factors which has detrimentallyaffected the Community industry. It was claimed that from1994 up to the investigation period the demand for bicycles inthe Community market decreased by approximately 3 millionunits. At the same time sales of the Community industry
decreased by 1,8 million units. It was precisely when consump-
tion wasat itslowes t, namely in 1996, that the Communityindustry recorded its worst financial results, namely −2,3 %.During the investigation period, when consumption increased,the financial situation of the Community industry slightly
improved since it recorded a negative return on sales of only −
1,3 %. They claimed that thiss howsa clear correlation betweenthe evolution of Community consumption and the performancesof the Community industry.
(54)In recital 100 of the Provisional Duty Regulation, the Commis-sion found that it could not be excluded that the negative
evolution of consumption contributed to the difficult situation
of the Community industry. However, it was concluded that itsimpact was not such as to break the causal link between dumpedimportsfrom Taiwan and the material injury s uffered by theCommunity industry. In any event, even if there is some correla-tion between the development of consumption and the
performance of the Community industry, this alone does not
sufficiently explain the bad performance of the Communityindustry in periods when consumption was developing posi-tively.
3.UndercuttingbyotherCommunityproducers
(55)According to TBEA and EBIA, part of the injury caused to the
Community industry was due to the significant undercuttingpractised by non-complainant Community producers located inItaly. They claimed that sales of such producers were particu-larly important in the most representative Community markets
and were made at extremely low pricesundercutting Taiwanes e
prices. In order to substantiate the alleged injurious behaviour ofthese producers, TBEA and EBIA referred to Eurostat statisticsfor 1996 and 1997 and compared the Taiwanese prices in nineMember Stateswith pricesof s hipmentsfrom Italy. It wasfoundthat only in the UK did the average Taiwanese import price1999R0397 — EN — 27.05.2000 — 001.001 — 11
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undercut that of Italian producers. They explained that these low
Taiwanese prices were due to the fact that the main Taiwaneseimportsinto the UK were children'sbicycles , which are cheaper
than other bicycles.
(56)It should be noted that, contrary to the price comparison
described in recitals 54 to 57 of the Provisional Duty Regulation,
TBEA and EBIA did not make any basic distinction in their
price comparison between the bicycle categories defined inrecital 14 of the Provisional Duty Regulation. They did noteven consider the fact that Eurostat statistics provided separateinformation for the three CN codesinvolved in the pres ent
investigation and that one code in particular contains information
relating to very basic bicycles without ball-bearings. As anexample, despite the fact that children's bicycles are less sophis-ticated, they did not distinguish between the difference in theproduct mix and homogeneouscategoriesof bicycless old in theCommunity market by Taiwanese and Italian operators. More-
over, no distinction was made between complainant and non-
complainant Italian producers. Nor did they consider the factthat the Eurostat statistics contain information on bicycles of allorigins. Finally, TBEA and EBIA ignored the fact that Italianproducers were selling their bicycles under different sales condi-tions from those of the Taiwanese, thus affecting the
meaningfulness of the price comparison exercise. From a metho-
dological point of view their findingsare thushighlyquestionable.
(57)The findingsmade in recitals91 to 95 of the Provis ional DutyRegulation concerning the non-complainant Community produ-cersare therefore confirmed.
4.Restructuring
(58)According to TBEA and EBIA, the Community industry had to
significantly restructure its activities by way of mergers and
acquisitions, which were responsible for the reduction in produc-tion capacities, unemployment and cost increases.
(59)Asindicated in recital 103 of the Provis ional Duty Regulation,the European bicycle industry undertook rationalisation andrestructuring efforts, still going on today, demonstrating at thesame time this industry's adaptability to new market situations.However, contrary to the suggestion made by TBEA and EBIA,the restructuring did not necessarily lead to increased costs. The
investigation has shown that some of the Community producers
included in the sample were able to reduce their costs by sellingequipment or buildings. In particular, this allowed certain largeEuropean groups to slightly improve their overall financial situa-tion, and to make certain cuts in costs, such as overheads,
depreciation, renting, financial costs, etc.
(60)Important operations such as mergers and acquisitions were
indeed performed by some European groups in the frameworkof the globalisation trend. Mergers and acquisitions should not
be seen as the cause of the negative situation of the companies
concerned but rather asitscons equence. Asregardsglobal injuryindicators, such as production, production capacity and unem-ployment, the evolution of the situation of the companiesmerged or acquired during the period under examination was
taken into account since they form the Community industry.
However, any impact caused by the cost of mergers and acquisi-
tionsin the financial s ituation of the companiesforming theCommunity industry, and more so in the sampled Communityproducers, was disregarded. It follows that costs resulting frommergers, acquisitions or group restructuring are not reflected in
the findingswhich led to the above conclus ion of material injury
suffered by the Community industry.
(61)Consequently, the restructuring of the Community industrycannot be held responsible for the material injury it has suffered.1999R0397 — EN — 27.05.2000 — 001.001 — 12
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5.Conclusiononcausation
(62)As a result of the above facts and considerations, the provisional
analysis and relative conclusions on causation are hereby
confirmed.
I.COMMUNITYINTEREST
(63)Contrary to the conclusions reached in the Provisional Duty
Regulation, EBIA claimed that there are compelling reasonsthat the adoption of antidumping measures is not in the Commu-
nity interest.
1.InterestoftheCommunityindustry
(64)In recital 103 of the Provisional Duty Regulation, it was found
that the material injury suffered by the Community industry dueto unfair competition from low-priced dumped importsrenderedit highly vulnerable. Thiss ituation had indeed required addi-
tional rationalisation and restructuring efforts in particular by
the small manufacturers. Many European companies had to closedown or revert to assembling rather than producing bicycles. Notimposing anti-dumping duties on low-priced dumped importsfrom Taiwan would thusundermine all the effortsmade by
European manufacturersover the las t few yearsin order to
survive and remain competitive on the market.
(65)Since no commentswith regard to the interes t of the Communityindustry were received, the contents of recitals 103 to 105 of theProvisional Duty Regulation are hereby confirmed.
2.Interestsofimporters, dealersandretailers
(66)EBIA claimed that many Community importers, dealers and
retailershave inves ted a great deal of time, effort and moneyover the yearsin promoting certain brandswithin the Commu-nity. These investments will be detrimentally affected by theimposition of anti-dumping measures. Furthermore, they addedthat the survival of the retailers relies upon the diversity and
quality of the bicycleswhich only Taiwanes e manufacturerscan
offer. Numerousjobsacros sEurope are allegedly being jeopar-dised by the imposition of anti-dumping measures.
(67)While taking the above claims into consideration, it should alsobe borne in mind that dealersand retailersworking with theCommunity industry also invested time and money in their
respective businesses. Therefore, it is considered that the nega-
tive effects of anti-dumping measures on retailers should beseen in the light of the contents of recital 110 of the ProvisionalDuty Regulation. In any event, the imposition of anti-dumpingmeasures will not put dealers and retailers buying and selling
Taiwanese bicycles in an unfairly disadvantageous situation as
compared to other retailersin the Community market. Theproposed measures will simply correct the distorting effects ofinjuriousdumping and res tore fair trade competition among allthe operatorsin the Community. Moreover, price increas eswillnot be automatic. Although price increases might occur as a
result of the imposition of the anti-dumping duty, as indicated
in recital 111 of the Provisional Duty Regulation, these increasesshould be very limited.
(68)Asmentioned in recital 108 of the Provis ional Duty Regulation,very few meaningful replieswere received from importerswhoare members of EBIA. After the imposition of the provisional
antidumping duties, the Commission intended to carry out on-
the-spot investigations in order to further investigate the situationof importersin the Community market, and to verify the rele-vance of the above claims. Since none of the members of EBIAagreed to cooperate with the Commission, the above claimsconcerning importerscannot be taken into cons ideration.1999R0397 — EN — 27.05.2000 — 001.001 — 13
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(69)In these circumstances, and in the absence of any information
which suggests the contrary, the conclusions reached at the
provisional stage concerning the effect of the imposition of anti-dumping measures on importers, traders and retailers are herebyconfirmed.
3.Interestofconsumers
(70)EBIA also claimed that imposing anti-dumping measures on
bicycles is most likely to have several negative consequences
on consumers. The consumer price of bicycles will increase;many modelsof bicycleswill no longer be affordable and cons u-merswill be forced to buy low-end range bicycles . TheCommunity market will be in the handsof a reduced number ofEuropean manufacturersand the availability of low-priced
bicycles of low quality imported from other sources such as
eastern European countries and India will increase. The restric-tion in choice and innovation in bicycleswill have negativeconsequences on a number of cyclists, particularly in MemberStates where Taiwanese bicycles have a very high market share.
Accordingly, the imposition of anti-dumping measures is alleg-
edly not in the interest of the Community consumers.
(71)With the exception of the effect of the antidumping measures onconsumer bicycle prices, these issues have already been dealtwith above. Consequently, the quality of bicycles sold in theCommunity market, competition and consumer choice in theCommunity market will not be affected by the imposition of
anti-dumping measures.
(72)As far as the consumer price increase is concerned, EBIA did
not provide any economic analysis indicating an alleged increasein consumer prices if anti-dumping measures were imposed.Given the margin of the distribution chain in the Community,the maximum impact of the antidumping duty on the consumerprice should be limited to 2,6 %. However, given the large
number of competitorsin the market, it isfar from certain that
the adoption of anti-dumping measures will result in any priceincreases at consumer level.
4.ConsequencesoncompetitionintheCommunitymarket
(73)EBIA isof the opinion that the impos ition of antidumping
measures would contribute to the creation of an oligopoly
formed by Atag, Monark and Derby to which some individualcompaniesincluded in the s ample belong. With anti-dumpingmeasures in force, these groups will allegedly be able to domi-nate the market and control the behaviour of small independentmanufacturers.
(74)EBIA also claimed that the imposition of any antidumping duty
adding up to the already high customs duty of 15,4 % will
contribute to reducing competition on the Community market.They recalled that the measures against Taiwan conclude a seriesof anti-dumping measures imposed against China, Indonesia,Malaysia and Thailand.
(75)Asindicated in recital 117 of the Provis ional Duty Regulation,there are a great many operatorsin the Community market s o
there is no risk of a monopolistic or oligopolistic situation being
created. On the contrary, the investigation has shown that thereisa lot of competition among all European manufacturersandimportersin the Community market.
(76)Asindicated in recital 62 of the Provis ional Duty Regulation, thetotal market share of the three main European groups in the
Community market isaround 28 %. In total, there are around
70 producers in the Community, most of them small andmedium-sized enterprises (SMEs), who have considerableexperience in the bicycle business. In addition, there arehundredsof importersof bicyclesmade in the USA, the CzechRepublic, Poland, India, Vietnam, Indonesia, Korea, Malaysia,1999R0397 — EN — 27.05.2000 — 001.001 — 14
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etc. It istherefore cons idered that there isno ris k of a monopo-
listic situation being created in the Community.
(77)Moreover, the fact that small manufacturers wished to supportand participated in the investigation and in addition were not
opposed to the conclusions reached in the Provisional Duty
Regulation strongly suggests that there is no risk of such a threatto them. On the contrary, their behaviour rather indicatesthatthey are convinced that their situation would deteriorate furtherif no antidumping measures were imposed against low-priced
dumped importsfrom Taiwan.
(78)Consequently, on the basis of the above facts and considerations,
the contentsof recitals116 to 118 of the Provis ional Duty Regu-lation are confirmed.
5.ReducedinnovationintheCommunity
(79)EBIA submit that given the important role of Taiwanese bicycle
manufacturersin the Community market who offer a broad range
of high quality productsit isnot in the Community interes t to
impose anti-dumping measures. It has been claimed that theTaiwanese can be credited with the most technical breakthroughsfrom the introduction of MTBs to full suspension bicycles andbeyond. They are also reputed for their R & D allegedly leading
the way in the production of power-assisted/electrically-powered
bicycles, a growing sector in the market, and also being theworld'sleading producer of folding bicycles . In particular,EBIA claimed that 2,2 % of Taiwanese manufacturers' turnoveris invested in long-term investments in R & D.
(80)Contrary to the suggestion made by EBIA, Taiwanese bicyclesimported in the Community are concentrated on the low-range
models, whereas only about 7 % of these imports can be consid-
ered asbeing in the high-range. The information available als oindicates that during the investigation period the sampled Taiwa-nese exporting producers invested not 2,2 % but approximatelyonly 1 % of turnover in R & D, i.e. less than the Community
industry.
(81)Finally, considering that the level of measures will not prevent
Taiwanese bicycles being sold in the Community market, theimposition of antidumping measures will not affect the pace ofinnovation asfar asit isdetermined by importsfrom Taiwan.
6.Conclusion
(82)Asno new conclus ive evidence or argumentswere received in
connection with the determination of Community interest, the
provisional findings are hereby confirmed.
J.DEFINITIVEANTI-DUMPINGDUTY
(83)Since no argumentsto invalidate the provis ional findingswhich
led to the imposition of the provisional anti-dumping duty wereput forward by the interested parties, the contents of recitals 121
to 125 of the Provisional Duty Regulation are confirmed.
(84)On the above basis, given the wide variety of bicycles exported
from Taiwan, an ad valorem duty is still considered to be the
most appropriate form of measure.
K.COLLECTIONOFTHEPROVISIONALDUTIES
(85)In view of the magnitude of the dumping marginsfound for the
exporting producers and in the light of the seriousness of the
injury caused to the Community industry, it is considered neces-sary that the amounts secured by way of provisional anti-dumping dutiesfor trans actionsinvolving the product concernedshould be definitively collected at the level of the definitiveduties.1999R0397 — EN — 27.05.2000 — 001.001 — 15
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L.FUTUREREQUESTSFORNEWEXPORTERTREATMENT
(86)Since sampling has been used in the investigation, a new expor-
ters' review pursuant to Article 11(4) of the Basic Regulation
with the objective of determining individual dumping marginscannot be initiated in thisproceeding. However, asalreadyexplained in recitals8 and 9 above, in order to ens ure equaltreatment for any genuine new exporting producer and the coop-erating companies not included in the sample, it is considered
that provision should be made for the weighted average duty
imposed on the latter companies to be applied to any newexporting producer who would otherwise be entitled to a reviewpursuant to Article 11(4) of the Basic Regulation,
HAS ADOPTED THIS REGULATION:
Article 1
1. A definitive anti-dumping duty ishereby impos ed on importsof
bicycles and other cycles (including delivery tricycles), not motorised,
with or without ball-bearings, falling within CN codes 8712 00 10,
8712 00 30 and 8712 00 80 originating in Taiwan.
2. The rate of the definitive anti-dumping duty applicable to the net,
free-at-Community-frontier price, before duty, shall, subject to para-graphs3 and 4, be 18,2 % (TARIC additional code 8900).
3. Products manufactured by the companies listed in the Annex shall
be subject to a definitive anti-dumping duty rate of 5,4 % (TARICadditional code 8548).
4. Products manufactured by the companies listed below shall be
subject to the following definitive antidumping duty rates:
Company Rate of dutyTARIC additional
code
Fritz Jou Manufacturing Co., Ltd 10,2 % 8698
Giant Manufacturing Co., Ltd 2,4 % 8699
Merida Industry Co., Ltd 2,5 % 8551
Ming Cycle Industrial Co., Ltd 2,5 % 8552
5. Unless otherwise specified, the provisions in force concerning
customs duties shall apply.
Article 2
Where any new exporting producer in Taiwan providess ufficient
evidence to the Commission that
— it did not export to the Community the productsdes cribed in Article
1(1) during the investigation period (1 November 1996 to 31October 1997),
— it isnot related to any of the exportersor producersin Taiwan
which are subject to the anti-dumping measures imposed by thisRegulation,
— it hasactually exported to the Community the productsconcerned
after the investigation period on which the measures are based, orit hasentered into an irrevocable contractual obligation to export asignificant quantity to the Community,
the Council, acting by simple majority on a proposal submitted by the
Commission after consulting the Advisory Committee, may amendArticle 1(3) of thisRegulation by adding the new exporting producerto the list in the Annex referred to in that Article.1999R0397 — EN — 27.05.2000 — 001.001 — 16
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Article 3
Amounts secured by way of the provisional anti-dumping duty imposed
by Regulation (EC) No 1833/98 shall be definitively collected at the
duty rate definitively imposed. Amounts secured in excess of the defi-
nitive rate of the anti-dumping duty shall be released.
Article 4
ThisRegulation s hall enter into force on the day following that of its
publication in the Official Journal of the European Communities .
ThisRegulation s hall be binding in itsentirety and directly applicable
in all Member States.1999R0397 — EN — 27.05.2000 — 001.001 — 17
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ANNEX
AcetrikesIndus trial Co., Ltd., Changhua
Asahi Enterprises Corporation, TainanAxman Enterprise Co., Ltd., Taichung
Century Manufacturing Co., Ltd., Taichung
Chien Chin Frame Co. Ltd, Tainan
Dahon Inc., Taipei
Dodsun Bicycle & Machinery Manufacturers, Tao Yuan
Fairly Bike Manufacturing Co., Ltd., Taipei
Formosan I Shin Enterprise Ltd., TainanGolden Cycle Corp., Taipei
High-Ride Bicycle Co. Ltd, TaichungHsieh Chan Bicycle Co., Ltd., Changhua
Ideal Bike Corporation, Taichung
John Ching Cycle Co. Ltd, Taichung
Jonq Tyan Enterprise Co. Ltd, Tainan
Kenstone Metal Co., Ltd., Taichung
Liyang Industrial Co., Ltd., TaipeiMT Racing Inc., Taichung
Pretty Wheel Industrial Co., Ltd., Taichung
Rockman Taiwan Bicycle Mfg. Inc., TaichungSan Ground Co., Ltd., Taichung
Sanfa Bicycle Industrial Co., Ltd., Taichung
Sheng Fa Industries Co., Ltd., TaipeiSouthern Cross International Co., Ltd., NantouSpeedstar Industries Co., Ltd., Kaohsiung
Taioku Manufacturing Co., Ltd., Nantou
Taiwan Hodaka Industrial Co., Ltd., TaipeiUnited Engineering Corp., Taoyuan
Wai I Industry Co., Ltd., Chia-Yi
Wheeler Industrial Co., Ltd., TaichungWilling Industry Co., Ltd., TaichungYuh Jiun Industrial Co., Ltd., Tainan1999R0397 — EN — 27.05.2000 — 001.001 — 18
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