COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 02.10.1997 
COM(97) 487 final 
Proposal for a 
COUNCIL REGULATION (EQ 
IMPOSING A DEFINITIVE ANTI-DUMPING DUTY 
ON IMPORTS OF ADVERTISING MATCHES ORIGINATING IN JAPAN 
AND COLLECTING DEFINITIVELY THE PROVISIONAL DUTY IMPOSED 
(presented by the Commission) 

Explanatory Memorandum 
By regulation (EC) No 1092/97 , the Commission imposed provisional anti-dumping 
duties on imports of advertising matches falling within CN Code 3605 00 00 and 
originating in Japan. 
Subsequently, a number of parties presented written comments, requested and were 
granted hearings. Their comments were taken into account where appropriate. The 
Commission continued to seek all information it deemed necessary for its definitive 
findings. 
Japanese exporters requested that the proceeding be terminated because the duration 
of the investigation has exceeded the period set in art. 7. (9) (a) of Regulation 
2423/88. According to this provision an investigation shall be concluded normally 
within one year of the initiation of the proceeding. It is proposed to reject such 
request on the ground of the complexity of the investigation, as explained in detail in 
recitals 2 and 3 of the proposed regulation. 
Some Japanese exporters made comments on the calculation of the provisional 
dumping margins. After careful analysis, two of the provisional dumping margins 
were reduced. (See recital 27). 
Comments were raised on injury, notably on cost allocation and market segments 
targeted by the dumped imports. Injury margins were marginally modified to take 
proper account of the adjustment of import prices to dealer level Remarks were also 
made on causality on account of the decreasing market for advertising matches. 
The Commission, on the basis of the deterioration of several injury indicators, 
concluded that the Community industry has suffered material injury caused by 
dumped imports and that it is in the Community interest to adopt definitive measures. 
It is therefore proposed to impose definitive duties on the imports of advertising 
matches originating in Japan, ranging from 9.8 % to 43.2%. 
'OJNoL158, 17.06.97, p. 8 
COUNCIL REGULATION (EC) No.... 
OF 
IMPOSING A DEFINITIVE ANTI-DUMPING DUTY 
ON IMPORTS 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, 
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community1, as amended by Council Regulation (EC) No 2331/962, and in particular 
Article 23 thereof, 
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection 
against dumped imports or subsidized from countries not members of the European 
Economic Community3, 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 1092/974 (hereinafter referred to as the 
provisional duty Regulation) provisional duties were imposed on imports into the 
Community of advertising matches falling within CN code 3605 00 00 and 
originating in Japan. 
' OJNoL 56, 06.03.1996, p. 1. 
2 OJNoL317, 06.12.1996, p. 1. 
3 OJ No L 209, 02.08.1988, p.!. 
4 OJ No L 158, 17.06.1997, p. 8. 
<X. 
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 to extend the 4 months validity of the 
provisional anti-dumping duties for two more months as allowed by Regulation 
* 
2423/88 (hereinafter referred to as the Basic Regulation). In support of this 
position, they argued that the investigation had already taken an excessive length of 
time, thus prolonging uncertainty and damaging their business. 
(3) This objection seems to be in contradiction with the request made by the exporters 
concerned that the Commission should analyse in more depth several key issues in 
the investigation: it should be recalled that the Commission has already stated in 
recital (7) of the provisional duty Regulation that the present investigation has been 
particularly complex. In these circumstances, further in depth analysis of 
arguments put forward by these parties, as well as extensions granted to them for 
submissions and replies, had to be restricted to a minimum. 
(4) Following the imposition of provisional anti-dumping measures, the following 
interested parties submitted comments in writing : 
(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 Werbetrager Vertriebs GmbH 
(5) The parties who so requested were granted an opportunity to be heard by the 
Commission. 
^•-«tk 
(6) The Commission continued to seek and verify all the information it deemed 
necessary for the purpose of its definitive findings within the period of time 
available. 
(7) Parties were informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of definitive anti-dumping 
duties and the definitive collection of amounts secured by way of provisional 
duties. They were also granted a period within which to make representations 
subsequent to this disclosure. 
(8) The comments submitted by the interested parties were considered; and, where-
appropriate, taken into account in the definitive findings to the extent that they 
were fully substantiated. 
2. Request for termination of proceeding 
(9) Japanese exporters requested that the proceeding be immediately terminated on the 
ground that the Commission had violated Article 7(9) (a) of the Basic Regulation. 
They claimed that the investigation was a very ordinary one and that it was veiy 
likely that it could have been concluded within the time limit provided for in the 
Basic Regulation. 
(10) As already mentioned in recital (7) of the provisional duty Regulation, the length of 
the investigation was mainly due to its complexity, particularly the detailed 
examination of the many figures and arguments put forward as well as the different 
issues and problems which arose in the course of the investigation. 
In this respect, given the claim of the Japanese exporters and the views expressed 
by other interested parties on the duration of the investigation, it seems appropriate 
to explain in some detail the main events which had a significant impact on ils 
duration. 
(11) Following the initiation of the investigation in August 1994, three different types oir 
questionnaires were sent to some 15 different companies in the Cpmmunity and in 
Japan. Verification visits were conducted and preliminary results were reached 
within the first half of 1995. 
(12) As indicated in recital (39) of the provisional duty Regulation, the investigation had 
then shown that sales made by Japanese exporters in the Community were not at 
the same level of trade as the large majority of the Community industry sales. 
Accordingly a level of trade adjustment had to be calculated. Considering the 
importance of the adjustment, in particular its direct impact on the undercutting and 
underselling margins, and consequently on the level of the possible anti-dumping 
duties, this issue was carefully considered before a provisional decision was taken. 
This already indicates that, contrary to the allegation made by some Japanese 
exporters, complex issues had to be dealt with in this investigation. A considerable 
amount of time had to be spent on assessing the level of trade adjustment and a-
preliminary conclusion on this issue could not be made until the end of 1995. 
(13) In the first half of 1996, the representative of the Community industry emphasised 
the weight and importance of the segmentation of the marketinto three main 
categories of customers. In this respect, the Community industry supplied 
complementary information on the link between the segmentation of the market and 
the level of prices and relative costs, thus elaborating on the data already submitted 
in the responses to the questionnaire. 
In accordance with Article 7 (2) (a) of the Basic Regulation, the Commission 
verified and analysed all the substantiated complementary information supplied and 
carried out the necessary reconciliation with the verified responses to the 
questionnaire of the Community industry and the Japanese exporters. These 
additional tasks took until the end of 1996. 
(14) Consequently, it has to be pointed out that contrary to the allegation of some 
Japanese exporters, the Commission did not accept any new responses to the 
questionnaire from the Community industry years after the deadline set. but 
considered it appropriate to investigate further substantiated information which 
completed the responses already received. 
(15) During 1996, several other problems had to be solved. Thus, some unrelated 
importers and one Community producer itself importing dumped advertising 
matches from Japan, who were originally not opposed to the proceeding, made their 
views known and put forward arguments related to the assessment of (he 
Community interest. All the submissions made, in some cases received late in 
1996, had to be given due consideration. 
(16) In 1997 the Commission became aware that one Japanese exporter might have 
provided misleading information during the investigation and requested that 
additional information be provided in order to take a final decision on the matter. 
Conclusive evidence was only received recently. 
(17) In the light of the above facts and considerations, even though the duration of the 
investigation was long, the Council refers to the statement'made in recital (7) of the 
provisional duty Regulation, namely that.the length of the investigation is mainly 
attributable to its complexity and, therefore, considers that there is no reason for 
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 the Community, produced and sold in Japan, and 
those exported to the Community from Japan as 'like products' within the meaning 
of Article 2 (12) of the Basic Regulation because they are either identical or have 
characteristics closely resembling each other. 
(19) An importer provided a list of around 50 models which Japanese exporters can 
offer to their Community clients alleging that the Community industry can only 
offer a few models. 
(20) It should be pointed out that not all those Japanese models are also sold in the 
Community; they are simply part of a list of models that the Japanese exporters are 
offering to their Community customers. Furthermore, the investigation contradicted 
the allegation of another importer that the Community industry does not offer, in 
contrast to Japanese exporters, a wide range of models of advertising matches. 
Indeed, it was found that the Community industry sold over 30 different models to 
its customers and that numerous, other personalised models had been produced to 
clients' specifications. 
(2iy Since no other comments were received on the product concerned and the 
definition of the 'like product'. The findings made on this issues, as established in 
recital (9) of the provisional regulation are confirmed. 
D. DUMPING 
1. Normal value 
(22) Before imposition of the provisional measures, the Commission received 
information that the relationship between the producer-exporter YAK A with 
another Japanese producer - Nittosha Match Company Ltd., which did not make 
itself known in the framework of this proceeding - might not only be limited to a 
relatively small share-holding. The Commission considered that it could not be 
excluded that YAKA's export prices might have been influenced by its relationship 
with Nittosha, which would render YAKA's reply to the questionnaire unreliable 
for the purpose of this investigation. The Commission informed YAKA forthwith 
of the serious implications this might have. 
Nittosha eventually informed the Commission that during the period of 
investigation on dumping it had exported to the Community the product concerned: 
the quantities it exported, however, had been négligeable in relation to the exports 
made by Yaka during the same period.. Under these conditions, exports from 
Nittosha could not have influenced those of Yaka ; moreover, based on verified 
information Yaka demonstrated that transactions between the two companies had 
not been influenced by the existence of the small shareholding. 
It was concluded that there was no reason to reverse the findings in respect of 
YAKA as an independent exporter from Japan. 
(23) One Japanese producer claimed that for export orders of 5,000 units the normal 
value should exclusively be based on such quantities and not also on orders fol­
lower quantities since orders of for instance 1,000 or 2,000 units are usually sold at 
higher prices. 
Firstly, it should be noted that for the purpose of this proceeding an order category 
of up to 5,000 units was defined by this producer in its response to the 
questionnaire. Secondly, it was found for this industry that for orders up to 5,000 
units no distinct difference in prices exists and that orders of substantially less than 
5,000 units only represent a relatively small part of the category up to 5,000 units. 
Thirdly, the normal value and the export price were both established on the basis of 
the same categories of products and so the comparison takes into account the order 
sizes in as far as they are considered to be relevant by industry standards. 
Consequently, the claim has to be rejected. 
(24) No further comments were received on the determination of the normal value. The 
Council therefore considers that the findings as established in recitals (10) to (J7) 
of the provisional duty Regulation 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 duty Regulation the Council considers 
that the findings made therein are to be confirmed. 
3. Comparison 
(26) One Japanese producer claimed that no adjustment should be made for salesmen's 
salaries as on export sales no salesmen were involved. During the on the spot 
verifications, at the premises of the company concerned, it was established however 
that salesmen were indeed involved in the export of advertising matches. 
Consequently, in order to allow for a fair comparison, an adjustment was made to 
the export price on the basis the corresponding cost incurred in export sales of the 
product concerned. 
(27) The same Japanese company repeated its claim, already made at the provisional 
stage of the investigation, to establish the normal value only on sales to unrelated 
distributors as, according to this company, export sales were taking place 
exclusively at this level of trade. 
Recital (20) of the provisional Regulation explains why the claim could not be 
accepted. Since no new arguments in support of this claim have been put forward 
by the company, the rejection of this claim is confirmed by the Council. 
(28) Two Japanese producers reiterated their claim that an adjustment should be made 
for print film making and artwork. 
The claim was based on the fact that for sales to the Community, generally, the 
print film was supplied by the customer while for sales on the Japanese market, in 
general, it was the producer who supplied the artwork and the film making. 
« 
One Japanese producer also further claimed that an adjustment should be made for 
those domestic orders for which a particular type of paper, called 'Japanese paper' 
was used, because this type of finishing of the product was not offered for sales to 
the Community. 
Both claims were rejected at the stage of the provisional duty Regulation as the 
company concerned was not in a position to quantify the market value of the 
adjustment claimed to the satisfaction of the Commission. 
After disclosure of the essential facts leading to the imposition of provisional 
measures the Japanese producers submitted additional information and 
explanations on the basis of which it was possible to determine the market value of 
the adjustments claimed. One of the Japanese producers was not in a position to 
demonstrate the market value of the adjustment claimed. As the claim itself was 
considered to be justified the adjustment for this producer was made by reference to 
another producer in Japan. 
Consequently the claim was granted to the extent that it was justified. 
(29) One Japanese producer maintained its request, already made at the provisional 
stage, that an adjustment should be made for the differences in time of delivery. 
This request was based on the grounds that the domestic delivery delay is. 
generally, much shorter than the one for export transactions and that the customers 
in the Community are charged lower prices because of the longer delay in delivery. 
In this respect the company concerned did not substantiate its claim, in particular by 
showing that customers consistently pay different prices on the domestic- and/or 
export markets because of the different delivery delays. 
Therefore the request has to be rejected. 
4. Dumping margins 
(30) The complainant argued that as the export prices of the Japanese producers are, 
generally, at the same level and as the Japanese domestic market is homogeneous 
the individual dumping margins found should not have such a wide spread. The 
complainant asked the Commission to review the dumping findings, particularly 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 value with its exports price as explained in 
recitals (10) to (24) of the provisional duty Regulation. 
In this respect, the Commission can confirm that the export prices charged by the 
Japanese exporters for comparable product types are, generally, for all exporters at 
a similar level. The investigation revealed however that the domestic prices of 
different Japanese producers vary significantly, thus constituting the principal 
reason for the variance in dumping margins established. 
The complainant further argued, in this context, that the sales channels of the 
Japanese producers on their domestic market are similar. The verification of the 
information submitted by the Japanese producers does not confirm this argument. 
Other arguments made by the complainant on the provisional findings concerning 
the margins of dumping related to the cost structure, age of the workers, low 
productivity, the fact that no manufacturer is left in Japan for match machines and 
the utilisation of old and insufficient machinery. 
Consequently, as the evidence provided by the complainant in support of its 
arguments is either merely circumstantial or not confirmed by the findings made 
during the investigation it is concluded that the arguments have to be rejected. 
(31) After having considered the arguments raised by the parties and after having 
modified, when appropriate, the provisional findings, the definitive dumping 
margins for the co-operating producers/exporters, expressed as a percentage of the 
free-àt-Community frontier price are as follows: 
Daiwa Trading & Industrial Co. Ltd. 31.8% 
Harima Match Company Co. Ltd. 63.5% 
Kobe Match Co. Ltd. 9.8% 
Yaka Chemical Industry Co. Ltd. 23.3% 
(32) The approach followed in recital (24) of the provisional duty Regulation for the 
assessment of the dumping margin applicable to non-co-operating companies in 
Japan which is based on facts available and verified during the investigation is 
confirmed by the Council. On that basis, it is considered that the highest dumping 
margin found, i.e. 63.5% with regard to a producer in Japan which had co-operated 
in the investigation, should also apply to non-co-operating producers in Japan. 
E. COMMUNITY INDUSTRY 
(33) The large majority of the Community producers of advertising matches are 
members of FEFA (Federation Européenne des Fabricants d'allumettes), the 
European association who lodged the complaint on behalf of its members. These 
producers, located in France, Spain, Italy, Belgium, Portugal and United Kingdom, 
are usually small and medium size enterprises with limited resources. 
Consequently, even though they all supported the complaint, only the main 
producers, representing 78% of the total Community output of the product 
concerned and thus, clearly meeting the criteria set forth in Article 4(5) of the Basic-
Regulation, have actively co-operated with the Commission in this investigation. 
(34) A Japanese exporter questioned the exclusion from the published provisional 
determinations of a Community producer located in France, who replied to the 
Commission questionnaire. 
(35) This situation is explained by the fact that this producer, although supporting the 
complaint, was not in a position to comply with the requirements of the 
Commission for the on-the-spot investigation due to important internal difficulties. 
Therefore it was decided that this producer could not be considered as actively co­
operating in the proceeding and was not included in the definition of the 
Community industry. 
(36) This decision is reflected in the contents of recital (25) of the provisional duty 
Regulation which indicates that the term 'Community industry' should be 
interpreted as referring to those Community producers of the like product whose 
10 
collective output constitutes a major proportion of the total Community production, 
who supported the complaint and who actively co-operated in the proceeding. 
(37) Despite the explanation provided in recital (26) of the provisional duty Regulation, 
one importer of Japanese advertising matches in the Community claimed that the 
main complainant Community producer should not be considered as part of the 
Community industry on the grounds that he imported directly or via its related 
companies dumped advertising matches from Japan in volumes representing far 
more than 4% of its own production. In support of its claim a list of the subsidiaries 
of the above complainant which allegedly imported the advertising matches from 
Japan was supplied. 
(38) The Commission re-examined the level of imports made by this Community 
producer and confirmed its provisional finding, namely that the quantities imported 
by this producer represented around 4% of its own total production of advertising 
matches. 
(39). Another exporter claimed that two of the complaining Community producers were 
no longer producing advertising matches. Even though this exporter is referring to 
events which allegedly happened after the investigation period, which therefore 
should normally not be taken into account, it has to be noted that no indication 
exists that any of the complaining Community producers stopped manufacturing 
the product covered by this investigation. 
(40) In conclusion, the definition of the Community industry for the purposes of the 
present proceeding and the provisional findings made by the Commission in this 
respect are hereby confirmed. 
F. INJURY 
1. Injury examination period and injury factors 
(41) Some exporters argued that the Commission had not been consistent as far as the 
investigation period for the assessment of injury is concerned. 
(42) The period covered by the injury examination is the whole period from I January 
1990 to 30 June 1994 as mentioned in recital (7) of the provisional duty Regulation. 
The 'investigation period' for dumping analysis covered a one year period from I 
11 
July 1993 to 30 June 1994. The main injury indicators were assessed for the whole 
injury examination period. However, when the information submitted was not fully 
substantiated or not reliable and consequently could not guarantee an accurate 
analysis of a certain injury factor within the injury examination period, the 
Commission considered it appropriate to disregard the information and based its 
conclusion on the available, substantiated information. 
(43) As requested by some exporters the Commission has further verified the 
information available in order to complete its analysis of certain injury factors, the 
results of which are given below : 
(a) Prices 
(44) With reference to recital (45) of the provisional duty Regulation, 80% of the sales 
of book and box matches taken together made by the Community industry in the 
Community market were taken into account in the price development exercise. It 
was found that from 1990 up to the investigation period sale prices charged by the 
Community industry increased on average by 4%. 
(45) A further analysis has been carried out separately for book and box matches, the 
latter representing around 60% of the total Community industry sales of matches 
and around 80% of Japanese exporters' total sales in the Community. On that new 
basis it was found that from 1990 up to the investigation period the sales prices of 
box matches charged by the Community industry decreased by 2% whereas the 
sales prices of book matches of this industry, representing the minority of Japanese 
sales in the Community, had increased by 10% during the same period. 
(b) Production capacity and capacity utilisation 
(46) As requested by one Japanese exporter, the Commission, notwithstanding the 
difficulties described in recital (44) of the provisional duty Regulation, made the 
best possible estimate of the production capacity of advertising matches and 
relative capacity utilisation of the Community industry. It appears that on average 
the Community industry worked 222 days per year and 2 shifts per day. On this 
basis whilst a reasonable average capacity utilisation ratio would be around 75%; 
for the type of business involved, the estimated capacity utilisation of the 
12 
Community industry from 1990 up to the investigation period was consistently low 
at around 56%, with a peak of 59% in 1991. 
(c) Cash flow 
(47) In addition to the provisional findings stated in recital (51) of the provisional duty 
Regulation, the operating cash flow of the Community industry established at 
company-wide level for the advertising division whose main activity is advertising 
matches, that is the product concerned, decreased by 7% from 1990 up to the 
investigation period. 
(d) Profitability 
(48) For 1990, the first year of the injury period under examination, it was found that the 
sales of the product concerned by the Community industry were still profitable with 
a rate of return on turn-over of around 2.5 %. 
2. Segmentation of the market 
(49) Following the publication of the provisional duty Regulation, interested parties did 
not object to the provisional finding set out in recital (36) of the provisional duty 
Regulation, namely that advertising matches were sold in the Community to 
separate categories of customers depending on the size of their orders. In fact it 
should be pointed out that the Japanese market had also been similarly categorised 
for the establishment of dumping. The investigation revealed that such 
categorisation is a crucial issue given its impact on prices and costs. 
(50) One Japanese exporter noted that the Community industry had requested the 
exclusion from the determination of injury of one customer on account of the very 
high volume of purchases, which rendered it not directly comparable within the 
other customer categories. The Commission established that the customer 
concerned was notable for the volume of its purchases. However, these 
characteristics did not constitute a sufficient ground to exclude it from the overall 
injury assessment. 
13 
3. Cost allocation method 
(51) Some exporters questioned the cost allocation method applied by the Community 
industry and provisionally accepted by the Commission. They argued that the 
selling, general and administrative (SG&A) expenses which the Community 
industry allocated either according to the number of orders or according to'the 
number of matchboxes should instead be allocated on a turnover basis. 
(52) Article 2 (11) of the Basic Regulation specifies for the examination of dumping 
that, in general, all cost allocations shall be based on available accounting data, 
normally allocated, where necessary, in proportion to the turnover for each product 
and market under consideration. An analogue approach seems appropriate in this 
case. 
This approach implies that the appropriateness of the cost allocation method has to 
be examined and appreciated on the basis of the consistency in its utilisation: and, 
that only in the absence of an appropriate method, the allocation of costs should be 
made on the basis of turnover. 
(53) After publication of the provisional duty Regulation, the Commission continued to 
seek the information it deemed necessary. In the light of the submissions received it 
was decided to conduct a very detailed on-the-spot investigation at the premises of 
the main Community producer which was part of the Community industry, to verify 
yet again its cost allocation method. 
This verification confirmed that the allocation method accepted by the Commission 
at the provisional stage of the investigation was consistently applied by the 
producer concerned and reasonably reflected the costs associated with the 
production and the sale of the product under consideration. Accordingly, the 
contents of recitals (49) to (50) of the provisional duty Regulation are hereby 
confirmed. 
4. Undercutting and underselling 
(54) Some Japanese exporters claimed for price comparison an allowance for the 
difference in delivery time on the grounds that, particularly for the small size 
orders, delivery time affected consumer choice and thus price comparability. These 
14 
exporters explained that longer delivery periods were the result of the fact that 
matches from Japan are usually shipped via ocean freight to the Community, thus 
significantly decreasing the cost of transport and lowering prices to clients, who are 
willing to wait several months for their orders. The Community industry delivery 
time, being much shorter, Japanese exporters have no choice but to lower prices to 
compensate for the longer delivery terms. 
These Japanese exporters consider that longer delivery time justified a price lower 
than that charged by the Community industry and estimate the amount of this price 
difference at around 5%, in line with the average undercutting found to exist. For 
the reasons given'in recital (29) this claim could not be accepted. 
(55) One Japanese exporter questioned its undercutting and underselling margins on the 
grounds that they were calculated on the basis of the prices of certain basic 
Community industry models which were not identical in all respects to the models 
exported by the company concerned to the Community. It was alleged that three 
basic models of the Community industry were wood-stem book matches, whereas 
the corresponding book matches exported by the company were made of carton 
paper (card-stem book-matches). The former material being more expensive than 
the latter, the exporter requested an adjustment reflecting the market value of the 
difference in physical characteristics between the above-mentioned models. 
(56) In the absence of evidence to substantiate the exporter 's claim, the Commission 
has investigated this issue on the basis of the information available to it. It 
appeared that sales of comparable models of woodstem and carton paper book 
matches were, not necessarily made at different prices. As an example, for a 
particular model, although there were 20% more wooden matches in this model, its 
sales price was the same as the card-stem model. This seems to indicate that any 
adjustment to the Japanese prices should be made downwards rather than upwards. 
In conclusion, based on the information available and, as the exporter concerned 
did not provide any evidence to substantiate its claim, the Commission could not 
take it into consideration. 
(57) The same exporter questioned the methodology applied by the Commission in 
calculating the undercutting and underselling amounts. It requested that the same 
15 
methodology applied in another anti-dumping proceeding be applied to calculate 
its margins. 
In the anti-dumping proceeding referred to by the exporter an average sales prices 
and an average non-injurious price for all the different models of the product under 
investigation were calculated, whereas in the present proceeding the Commission 
compared prices on a model-per-model basis. 
(58) In cases where the product concerned is not sold under an homogeneous shape or 
form and there are no domestic standard models directly comparable with imported 
standard models of the like product, it is necessary to define the most appropriate-
unit of measurement in order to allow prices to be compared. 
As explained in recitals (36) to (41) of the provisional duty Regulation, standard 
basic models of advertising matches and different categories of customers were 
found to exist in the Community market. They even represented the large majority 
of the trade involved. Sales prices of the different standard models of the like 
product sold by the Community industry could therefore be compared with those of 
the Japanese exporters on a model-per-model basis separately for the main 
categories of customers. 
As the method followed in this proceeding is the most accurate to determine the 
undercutting and underselling margins, the Council endorses the Commission's 
rejection of the request made by the exporter concerned to calculate their margins 
on the basis of overall weighted average prices. 
5. Injury suffered by the Community industry 
(59) While recognising that the Community industry may have suffered some injury, a 
number of Japanese exporters claimed that this injury could not be qualified as 
material. Firstly because only small and medium size orders, representing a limited 
share of the whole advertising matches market, were affected by a negative return 
on sales. Secondly, because the Commission claimed material injury exclusively on 
the basis of the negative trend of one single injury factor, namely profitability. 
Thirdly, because several factors were pointing to no injury at all. 
16 
(60) With reference to the first argument raised by these exporters, small and medium 
size orders represent a large share of the total Community market, namely around 
59% in terms of volume but around 67% in terms of value. It can therefore be 
concluded that these segments are the main sources of revenue for the Community 
industry. Accordingly, even if this industry was still performing well in the large 
order segment, its ability to compete in this segment is dependent on maintaining 
overall financial viability. The deteriorating financial situation of the Community 
industry, which was found to be negative overall during the investigation period, is 
therefore a threat to the entire advertising matches sector in the Community. 
(61) The above exporters indicated that some injury factors pointed to a no injury 
situation but did not specify to which indicators they were referring. Furthermore 
the statement that the Commission based its conclusion on a single injury factor is 
not correct. 
During the whole period under examination, it was found that employment in the 
advertising matches sector decreased by 13%, the share of the Community market 
held by the Community industry in terms of value decreased by about 10%, cash 
flow decreased by 7% and overall profitability became negative after having shown 
profits of 2.5% in 1990. 
Furthermore, it must not be neglected that Community industry prices were 
depressed for box matches which represent 60 % of total sales by this industry and 
that the slight increase in overall sales prices for matches of 4.3% during the 
investigation period could not even cover the effects of inflation. This price 
suppression certainly played a significant role in the deteriorating financial situation 
of the Community industry. 
(62) These exporters also supplied annual accounts of the main complaining Community 
producer and calculated a return on investment of 28.65% for this producer during 
the year 1995, that is after the end of the investigation period. According to them, 
such a high return should demonstrate that the financial situation of the Community 
producer concerned is excellent. 
To calculate such a return on investment, these exporters applied the profit of the 
large size orders, as stated in recital (50) of the provisional duty Regulation, to the 
17 
overall turnover as reported in the annual accounts they supplied. Then they 
established the ratio between this extrapolated profit over the equity as reported in 
the annual accounts. 
(63) It appears that these exporters have confused the return on investment 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 not covered by the present investigation. 
By reference to the turnover as reported in the consolidated annual accounts , the 
sales value of the large orders segment only represents 0.4%. Consequently, such 
an estimate of the return on investment must be disregarded and considered 
erroneous and misleading. 
xo-
6. Conclusion on injury 
(64) On the basis of the facts and considerations developed above and based on the 
deterioration of several injury indicators such as profitability, market share in value 
terms, cash flow and employment, combined with low capacity utilisation and the 
effects of unsatisfactory price development, the Council confirms that the 
Community industry has suffered material injury in accordance with Article 4( I ) of. 
the Basic Regulation. 
G. CAUSATION OF INJURY 
(65) The Commission had provisionally examined the extent to which the material 
injury suffered by the Community industry was caused by the impact of dumped 
Japanese imports, and whether other factors had caused or contributed to that injury 
in order to ensure that injury caused by these other factors was not attributed to the 
dumped imports concerned. Such other factors considered were the evolution of 
consumption, competition from other producers in the Community, other imports, 
the export performance of the Community industry and the behaviour of the main 
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 established between the alleged dumped 
imports and the material injury suffered by the Community industry. They staled 
that Japanese exporters had not increased the volume of their share of The 
Community market although their import prices had increased by 40%. 
Furthermore they could not understand why in the large size orders segment where 
the highest undercutting margin by Japanese exporters was found, no causal effects 
seemed to exist. On the contrary a profitable situation had emerged. 
(67) It should be borne in mind however, as mentioned in recitals (58) to (62) of the 
provisional duty Regulation, that low-priced dumped Japanese imports increased 
their Community market share in value terms by 24% whereas the Community 
industry lost 10% of this share. From 1990 up to the investigation period, the 
Community industry prices were constantly suppressed and despite a significant' 
price increase Japanese products still undercut the former prices by an average 
margin of 6,2%. Over the years, this situation has caused significant difficulties for 
the Community industry whose profitability became negative during the 
investigation period. 
An additional link between the negative situation of the Community industry and 
the dumped Japanese imports was established through the fact that the return on 
sales of the Community industry was found to be significantly worse in the sales 
segments where Japanese products were mainly present, that is in the small and 
medium size order segments. 
(68) The Commission has further analysed separately the market share of advertising 
matches for each category of customer depending on the order size in terms of 
volume and value as shown in the table below. This table was established for the 
investigation period on dumping (1 July 93 to 30 June 94) on the basis of more than 
80% of sales made by the Community industry and around 80% of Japanese sales 
in the Community market: 
Order 
size 
Small 
Medium 
Large Japanese 
Exporters 
volume 
14% 
14% 
4% value 
16.5% 
13% 
3% Community 
industry 
volume 
11% 
20% 
37% value 
16.5% 
21% 
30% Total 
Market share 
volume 
25% 
34% 
41% value 
33% 
34% 
33% 
19 
(69) This analysis shows that while the volume of the market for large orders represents 
around 41% of the total advertising matches market, the share held by the 
Community industry for large orders amounts to nearly ten times that of Japanese 
exporters. The limited volume sold by the Japanese exporters in this segment 
explains why limited effects were found. * 
(70) As to the other two segments of the markets, they represent around 60% of the 
volume and around 67% of the value of the overall market share, thus 
demonstrating that these are the key segments in the advertising matches business. 
(71) It follows that low-priced dumped Japanese imports are, therefore, targeting these 
key segments of the Community market, the volume of their share of the market in 
these segments (47%) being comparable with that of the Community industry 
(53%). Consequently the large quantities sold by the Japanese exporters combined 
with their constant price pressure since 1990 in such key segments of the market 
has clearly caused material injury to the Community industry. 
(72) As far as price development is concerned; and as already mentioned in chapter VI 
(Injury) above, sales prices of boxes and book matches of the Community industry 
developed differently from 1990 up to the investigation period. Prices of box 
matches decreased by 2% whereas prices of book matches increased by 10%-. 
Considering that box matches represent the large majority of Japanese sales (around 
80%) during the above period, the link between the negative price development for 
the box matches and the presence in the Community market of dumped Japanese 
imports can clearly be established. 
(73) In conclusion, based on the findings as explained and developed in the recitals 
above, the Council confirms that low-priced dumped imports from Japan, taken in 
isolation, have caused material injury to the Community industry. 
H. COMMUNITY INTEREST 
(74) In its provisional duty Regulation the Commission indicated why the Community 
interest calls for intervention. In this respect it is recalled that the other producers 
in the Community are small and medium size enterprises representing up to 22%- of 
the total Community production of the product concerned. The fact that the large 
majority (90%) of these producers has consistently supported the complaint shows 
20 
that they are of the opinion that it is in their interest to restore fair trade practices in 
the Community market with the imposition of anti-dumping measures. 
(75) As to the competition law investigations into the main Community producer in the 
Community market, the Commission is aware of the fact that a complaint was 
lodged with the competent services of the Commission, alleging that Swedish 
Match abused and was abusing its dominant position by practising a policy of 
acquisitions and of predatory pricing.'That complaint has been dismissed, without 
objections from the complainant, because no evidence was found or had been 
supplied of the existence of the alleged abuses. 
(76) As to the allegation according to which the main Community producer might adopt 
or has already adopted a long-term strategy of selling at a loss, while confirming 
what it stated at recital (94) of the provisional duty Regulation, it may be added 
that the allegations forwarded in this respect were based on a few price quotations 
referring to a very short period of time subsequent to the investigation period. 
These allegations cannot be taken in consideration because the number of 
quotations is very limited (three) and refers to a period of time subsequent to the 
investigation period. 
(77) In summary, the Council, after an appreciation of all the various interests, taken as 
a whole, and for the reasons given in the provisional duty Regulation concludes 
that, on balance, it is in the Community interest to impose definitive measures. 
I. ANTI-DUMPING MEASURES 
(78) Based on the above conclusions on dumping, injury, causal link and Community 
interest, it was considered what level and form the anti-dumping measures should 
take in order to remove the trade-distorting effects of injurious dumping and to 
restore effective competitive conditions in the Community market. 
(79) After the publication of the provisional duty Regulation the Commission became 
aware that the level of trade adjustment made in establishing the injury elimination 
level, had been applied to the unrelated importers' resales prices whereas such an 
adjustment should be applied to Japanese exporters' sales prices in the Community. 
Accordingly the injury margins have been recalculated. 
21 
(80) Since the injury margin, that is the level of prices at which the ir rious effects of 
the dumped imports would be removed, was lower than the dumping margin found 
for three of the exporters concerned in the investigation, the injury margin was used 
in order to determine the level of the measures to be applied to these exporters. 
For one exporter the dumping margin, which was lower than the injury margin 
found, was used in order to determine the level of the applicable measures. 
(81) On the above basis, definitive duties, in the form of ad valorem duties, should be 
imposed. 
(82) The complainant claimed that, in order to avoid the possibility of circumvention of 
the duties, the same duty should be imposed on all the co-operating exporting 
producers. This claim was based on a report of a Japanese economic research 
institute alleging the existence of a close co-operation on domestic and export 
prices of the Japanese industry. 
The information collected by the Commission and verified on the spot did not 
provide any evidence whatsoever of a common price strategy by the Japanese 
industry, at least as far as domestic prices, and therefore the normal value, are 
concerned (see recital (22) and (23) above). Furthermore, the imposition of the 
same duty on all the exporting producers, regardless of their different normal 
values, would constitute arbitrary treatment that could not be justified by the mere. 
unsubstantiated possibility of circumvention of the duties. 
This claim is therefore rejected. 
J. COLLECTION OF THE PROVISIONAL DUTIES 
(83) In view of the magnitude of the dumping margins found for the exporting producers 
and in the light of the seriousness of the injury caused to the Community industry, 
it is considered necessary that the amounts secured by way of provisional anti­
dumping duties should be definitively collected at the level of the definitive duties. 
22 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. Definitive anti-dumping duties are hereby imposed on imports of advertising 
matches originating in Japan. The product as described falls within CN codes 
Ex 3605 00 00 (Taric code 3605000010). 
For the purposes of this Regulation, advertising matches are matches incorporating 
advertising matter other than or in addition to the logo or details of the match 
manufacturer. 
2. For the purpose of this Regulation, the rate of duty applicable to the net free-at-
Community-frontier price before duty shall be 43.2% (Taric additional code , 8900) 
with the exception of imports manufactured and exported by the following 
companies, which shall be subject to the following rate 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% for the products manufactured and exported by Kobe Match Co. 
Ltd (Taric additional code 8023) 
(c) 10.3% for the products manufactured and exported by Yaka Chemical 
Industrial Co. Ltd (Taric additional code 8024) 
3. Unless otherwise specified, the provisions in force concerning customs duties shall 
apply. 
Article 2 
The amount secured by way of provisional anti-dumping duty under Regulation 
(EC) No. 1092/97 shall be definitively collected at the duty rate definitively 
imposed. 
Amounts secured in excess of the definitive rate of anti-dumping shall be released. 
23 
Article 3 
This Regulation shall enter into force on the day following its publication in the 
Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in all 
Member States. 
Done at Brussels, For the Council 
24 
ISSN 0254-1475 
COM(97) 487 final 
DOCUMENTS 
EN 02 il 
Catalogue number : CB-C0-97-496-EN-C 
ISBN 92-78-25074-0 
Office for Official Publications of the European Communities 
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