COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 0604.1995 
COM(95) 141 final 
Proposal for a 
COUNCIL REGULATION (EC) 
amending Regulation (EEC) N° 3433/91 insofar as it imposes a definitive 
anti-dumping duty on imports of gas-fuelled, non-refillable pocket 
flint lighters originating in the People's Republic of China 
(presented by the Commission) 
-u 
EXPLANATORY MEMORANDUM 
(1) By Regulation (EEC) N° 3433/911, the Council imposed a definitive anti-dumping 
duty on imports of gas-fuelled, non-refillable pocket flint lighters originating, inter 
alia, in the People's Republic of China. The rate applicable to products originating 
in that country was set at 16.9%, corresponding to the level of the dumping found 
for the People's Republic of China during the original investigation period. 
(2) In November 1993, the Commission received a request for a review of the above 
Regulation lodged by the European Federation of lighter Manufacturers. The 
request alleged changed circumstances concerning the People's Republic of China in 
that there had been an increase in the dumping margin for Chinese exports to the 
Community and, consequently, further injury. In December 1993, considering that 
sufficient evidence had been submitted by the applicant, the Commission announced 
by a notice2 the initiation of a review of Council Regulation (EEC) N° 3433/91 in 
respect of imports originating in the People's Republic of China, in accordance with 
Article 14 of Regulation (EEC) N° 2423/88. 
(3) Since this is a review case it has been decided to proceed directly to definitive 
measures rather than to pass through the provisional stage. In view of this, the 
Commission, prior to drafting its proposal on this case, provided interested parties 
with details of its calculation and gave them sufficient time to comment and correct 
material errors. 
(4) the current review investigation showed that the dumping margin for Chinese 
exports had considerably increased. Expressed as a percentage of the CDF 
Community frontier value of the imports, the dumping margin was found to be 
80.3%. 
1 OJ No L 326, 28.11.1991, p. 1 
2 OJNo C 343, 21.12 1993, p.10 
if 
(5) The investigation also showed that the injury suffered by the Community industry 
had considerably worsened since, in a growing market, the Community producers 
concerned had lost market share and their profitability deteriorated. The analysis of 
the causal link between this injury and the dumped imports from the country 
concerned (detailed in recitals 51 to 61 of the attached proposal), led to the 
conclusion that the said imports had, taken in isolation, caused further material 
injury to the Community industry. 
(6) In the original investigation, the adoption of measures was considered to be in the 
interest of the Community. Since no new arguments have been made which would 
lead to reconsider this position, the findings of Regulation (EEC) No 3433/91 in this 
respect should be confirmed. Accordingly, the measure in force with regard to the 
People's Republic of China, which is no longer sufficient to counteract the injurious 
dumping, should be amended. 
(7) In this respect, given that the injury elimination level was found to be higher than 
the dumping margin, the necessary amendment should be based on the dumping 
margin established in the current investigation. In addition, since prices of the 
Chinese imported disposable flint lighters steadily decreased after the imposition of 
the measures in 1991, it is highly foreseeable that an increased ad valorem duty 
would again lose its effectiveness within a relatively short time. Accordingly, a 
simple amendment to the current ad valorem duty does not appear to be 
appropriate. 
It is therefore proposed to amend the measure in force with regard to the People's 
Republic of China by imposing a specific duty per lighter (namely 0.065 ECU per 
piece) The proposed amendment should constitute, insofar as the People's 
Republic of China is concerned, a modification within the meaning of Article 15 (1) 
of Regulation (EEC) No 2423/88. Accordingly, the amended measure on imports 
of gas-fuelled, non-refillable pocket flint lighters originating in the People's Republic 
of China should, subject to the relevant provisions concerning the duration of 
measures, lapse after a period of five years starting from the date on which it will 
enter into force. 
Council Regulation (EQ N° 
amending Regulation (EEC) N° 3433/91 insofar as it imposes a definitive 
anti-dumping duty on imports of gas-fudled, non-refillable pocket 
flint lighters originating in the People's Republic of China 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EEC) N* 2423/88 of 11 July 1988 on protection 
against dumped or subsidised imports from countries not members of the European 
Economic Community1, as last amended by Regulation (EC) No 522Z942, and in 
particular Article 14 thereof, 
Having regard to the proposal submitted by the Commission after consultations within 
the Advisory Committee, 
WHEREAS: 
A. PREVIOUS INVESHGAHONS 
(I) By Regulation (EEC) N° 3433/913, the Council imposed a definitive anti-dumping 
duty on imports of gas-fuelled, non-refillable pocket flint lighters falling within CN 
code ex 9613 10 00 and originating, inter alia, in the People's Republic of China. 
The rate applicable to products originating in that country was set at 16.9%. 
1 OJNaL 209, ©2.08.1988, p. 1. 
2 OJNoL 6$, I0.03.1994,p. 10. 
3 OJ No L 326,28.1LI991, p. 1 
(2) By a notice published in March 19924, the Commission initiated a review of 
Regulation (EEC) N° 3433/91 insofar as it concerned certain Chinese companies 
which alleged, in particular, that they did not export the product concerned during 
the period covered by the original investigation (a so-called newcomer review). 
By Decision N° 93/377/EEC of 22 June 19935, the Commission terminated the 
above review investigation without any changes to the measures in force. 
B. CURRENT REVIEW INVESTIGATION 
(3) In November 1993, the Commission received a request for a review of the above 
Regulation insofar as it concerns imports originating in the People's Republic of 
China. The request was lodged by the European Federation of lighter 
Manufacturers, acting on behalf of Community producers together representing a 
major proportion of the Community production of the product in question. The 
request alleged changed circumstances since the conclusion of the original 
investigation in that there had been an increase in the dumping margin for exports 
to the Community from the People's Republic of China and, consequently, further 
injury. It was considered that the review request contained sufficient evidence to 
justify the opening of an investigation. 
(4) In December 1993 the Commission announced by a notice6 the initiation of a 
review of Council Regulation (EEC) N° 3433/91 in respect of imports of gas-
fuelled, non-refillable pocket flint lighters originating in the People's Republic of 
China, in accordance with Article 14 of Regulation (EEC) N° 2423/88 (hereinafter 
referred to as 'the Basic Regulation'). 
(5) The Commission officially advised the exporters and importers known to be 
concerned, the representatives of the exporting country and the complainants and 
gave the parties concerned the opportunity to make their views known in writing 
and to request a hearing. 
4 OJNoC 62, 11.3.1992, p. 2 
5 OJ No L 158, 30.6.1993, p. 43 
6 OJ No C 343, 21.12.1993, p. 10 
(6) One importer, two exporters and one producer of the People's Republic of China 
made their views known in writing. Four Community producers, Bic S.A., 
Swedish Match S.A, Tokai Setki GmbH and Flamagas S.A. also submitted their 
views in writing. Several of the above-mentioned companies requested and were 
granted hearings. 
(7) The Commission sought and verified all the information it deemed necessary for 
the purpose of its investigation and carried out investigations at the premises of the 
following companies: 
Community producers (factories and/or sales offices) 
Bic Deutschland GmbH, Ettlingen, Germany 
- Bic S.A., Clichy, France 
- Bic S.A., Redon, France 
- Biro Bic Ltd, London, United Kingdom / 
Bryant & May, High Wycombe, United Kingdom 
Flamagas S.A., Barcelona, Spain 
- Laforest Bic S.A., Tarragona, Spain 
Swedish Match, Visselhôvede, Germany 
Swedish Match S.A., Rillieux-la-Pape, France 
- Tokai Seiki GmbH, Mônchengladbach Germany 
Tokai Vesta Hispania S.A., Alcalâ de Henares, Spain 
Exporters 
Capital Line Industries Ltd, Hong Kong. 
Gladstrong Investments Ltd, Hong Kong 
Unrelated importer 
Trôber GmbH, Hamburg, Germany 
(8) The Commission also sought information from producers in the Philippines which 
was used as the analogue country for the establishment of normal value (see 
recitals 19 to 27 below). Detailed and complete information was provided by and 
verified at Swedish Match Philippines Inc., Manila, Philippines. 
(9) The exporters and the sole importer which co-operated, requested and were 
informed of the essential facts and considerations on the basis of which it was 
intended to recommend the amendment of the definitive anti-dumping duty in force 
on imports of the product concerned originating in the People's Republic of China. 
The Commission took into account, where appropriate, the submissions of the 
parties concerned. 
(10) The investigation of dumping covered the period 1 January to 30 September 1993 
(hereinafter referred to as 'the investigation period'). 
C. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT 
AND COMMUNITY INDUSTRY 
(i) Product under consideration 
(11) The product subject to the definitive anti-dumping duty referred to in recital 1, is 
gas-fuelled, non-refillable pocket flint lighters (hereinafter referred to as 'disposable 
flint lighters'). 
It should be recalled in this respect that there are other disposable lighters on the 
market (piezo lighters) the technical characteristics of which are quite different 
from the above-mentioned product! Therefore they were not considered to be 
alike to the product concerned in the original investigation, were not covered by 
the original investigation and were excluded from the scope of the measures. 
(12) The importer which co-operated claimed that, in addition to the already existing 
separation between flint and piezo disposable lighters, a new distinction should be 
made amongst disposable flint lighters, between plastic body and nylon body 
lighters. This importer claimed that two markets for disposable flint lighters 
* 
existed, one offering luxury nylon-based lighters and the other so-called standard 
plastic body lighters. Alleging that all Chinese disposable flint lighters had a plastic 
body, this importer requested that the product under consideration be restricted to 
such products. 
(13) In the course of the investigation carried out by the Commission, it was found that 
such a narrow definition of the product under consideration would not be justified, 
notably because the alleged divisibility of the disposable flint lighters market into 
segments, which is based on differences in physical characteristics and consumers' 
perception of the product, is not confirmed by facts. 
The product in question is indeed manufactured in different sizes and models and 
different materials may be used in the composition of the lighter body. However, 
all these disposable flint lighters have the same basic technical characteristics, the 
same basic application and perform the same function. In contrast to this, it has to 
be noted that the distinction between flint and piezo disposable lighters was based 
on differences in technical characteristics which are clearly established. 
In addition, it is also clear that the difference between flint and piezo lighters is 
perceptible to consumers, while the difference between disposable flint lighters 
with a body made of either plastic or nylon, is not. Indeed, the product concerned 
is a disposable one and the statement that consumers would be aware of the above-
mentioned difference is not evidenced, among other things, by the existence of 
clearly separate channels of sales. On the contrary, all disposable flint lighters are 
sold indistinctly in the same kind of shops to customers having the same 
expectations and nothing is done to make consumers aware of the alleged 
differences between plastic body and nylon body lighters. In particular, it should 
be noted that plastic body and nylon body lighters are not easily distinguishable 
since they are both available in translucent and opaque forms. 
(14) Therefore, the whole range of models of disposable flint lighters is to be 
considered as forming one single category of product, irrespective of the material 
used to manufacture the body, which represents, in any case, only a minor 
difference in physical characteristics, as well as in cost terms (see below recital 36). 
The findings of the original investigation in respect of the product under 
consideration, as recalled in recital 11 above, are therefore confirmed. 
(ii) Like product 
(15) The importer which co-operated claimed that the findings of the original 
investigation in respect of the like product definition should be reconsidered, in 
order to take account of the fact that a Community producer, newly involved in the 
proceeding, was manufacturing plastic body lighters, allegedly 'identical' to those 
imported from the People's Republic of China, while other Community producers, 
as well as the co-operating producer in the analogue country, were producing 
nylon body lighters which should be considered according to this importer as, at 
most, 'similar' to Chinese lighters. 
It should be stressed again in this respect that a minor physical difference, such as 
the material used for the manufacture of the lighter body, which has no impact on 
the basic technical characteristics, basic application and function of the product and 
which is not perceptible to consumers, is insufficient to justify a distinction being 
made between allegedly 'identical' and 'similar' disposable flint lighters. This 
conclusion applies to the comparison of disposable flint lighters imported from the 
People's Republic of China with, respectively, all those produced and sold in the 
Community and those produced and sold by the co-operating producer in the 
analogue country. 
(16) The same importer also made representations regarding various physical 
differences said to have an impact on the like product definition. However, these 
allegations, in general already addressed during the original investigation, were not 
supported by decisive new evidence that would justify their being taken into 
account in the like product definition, notably as regards the consumers' perception 
of the product. 
(17) In these circumstances, it is confirmed that the disposable flint lighters produced 
and sold by the Community industry and those imported from the People's 
Republic of China possess similar basic physical and technical characteristics for 
them to be considered a like product. While there may be some minor differences 
between the imported product from the People's Republic of China and the 
Community production, these differences are not such as to warrant a finding that 
they should not be regarded as like products. The findings of the original 
investigation in respect of the like product definition are therefore confirmed. 
As explained under recitals 26 and 36 below, the above conclusion is equally valid 
for the disposable flint lighters produced and sold by the co-operating producer in 
the analogue country. 
(Hi) Community industry 
(18) In the light of the above, the elaim that the Community industry should be 
redefined as comprising only the Community producer manufacturing plastic body 
lighters was rejected. On this basis, it was found that during the investigation 
period, the Community producers on behalf of which the request for a review was 
lodged, represented more than 70% of total Community production of the like 
product. Accordingly, it is concluded that the producers in question constitute the 
'Community industry' within the meaning of Article 4(5) of the Basic Regulation. 
8 
D. DUMPING 
(a) Normal value 
(i) Analogue country 
(19) Since the People's Republic of China is not a market economy country, normal 
value had to be determined on the basis of information obtained in a market 
economy country (so-called analogue country) in accordance with Article 2 (5) of 
the Basic Regulation. For this purpose, the complaint suggested that Thailand be 
used as the analogue country as in the original investigation and contact was made 
with the two Thai producers that had co-operated with the said investigation. On 
this occasion, the Thai producers did not co-operate. 
(20) Thus, contact was also made for this purpose with one Korean producer and two 
producers in the Philippines. Only the producers in the Philippines indicated that 
they were willing to co-operate with the Commission and submitted replies to the 
Commission's questionnaire. However, in the case of one producer in the 
Philippines, the reply was too limited and more details were requested. 
Subsequently, the producer concerned informed the Commission that it was not 
willing to supply more detailed information. Consequently, this producer was 
considered as uncooperative, with the result that only one company remained as a 
possible source of information concerning the Philippines. 
Following disclosure of the essential findings of the investigation, the importer 
which co-operated claimed that a Hong Kong Company, Cli-Claque Ltd, allegedly 
manufacturing flint disposable lighters in the Philippines, should also have been 
contacted. The existence of this alleged producer in the Philippines was only 
brought to the attention of the Commission at an extremely late stage of the 
investigation and could not, therefore, be considered without significantly 
impeding the investigation. 
(21) Since no other possibility existed for determining normal value, a change in the 
analogue country could not, therefore, be avoided. In the light of the recent 
jurisprudence of the Court of Justice regarding the criteria applicable to the choice 
of analogue countries, the following were verified to assess the appropriateness of 
the Philippines for this purpose: 
• representativeness of the market concerned: 
the size of its domestic market makes the Philippines a representative country for 
the establishment of normal value for the People's Republic of China (total 
domestic sales of the co-operating producer in the Philippines amount to more than 
5% of Chinese exports to the Community); 
• openness of the market: 
the Filipino market is open to competition: the local production of disposable 
lighters is facing price competition mainly due to substantial imports. The 
structure of demand also favours competition since many operators, such as 
supermarkets and medium or small-sized retailers are present on the market; 
• access to basic materials: 
finally, it does not appear that significant differences exist between China and the 
Philippines regarding the ease of access to basic materials. It is true that some 
parts and components are imported in the Philippines but Chinese producers also 
import from suppliers located outside China some of the most sensitive parts of 
lighters, such as the flint. Overall, the availability of parts of lighters appears to be 
at least as good in the Philippines as it is in the People's Republic of China. 
(22) However, given that the company which co-operated in the Philippines is part of a 
group of companies of which a complainant is also part, the Commission also 
considered it necessary to analyse the implications of the existence of such links, 
with a view to determining whether this situation had any distorting effect on the 
data submitted and, accordingly, whether this information could or could not be 
used in the framework of the current review investigation. 
10 
(23) An in-depth examination of the costs of production supplied by the Filipino 
producer concerned showed that due to the fact that certain parts used in the 
manufacture of disposable flint lighters were bought from related parties, 
additional costs were incurred. Therefore, for the purpose of making a reasonable 
and appropriate profitability test, the additional costs in question were deducted. 
After such adjustment, it was found that the prices practised by the co-operating 
Filipino producer for sales of the like product on the domestic market in the 
ordinary course of trade permitted the recovery of all costs incurred in the ordinary 
course of trade plus a normal profit margin. 
In these circumstances, it was concluded that normal value could be based, in 
accordance with Article 2 (5) (a) (i) of the Basic Regulation, on the prices at which 
disposable flint lighters were actually sold for consumption on the domestic market 
in the Philippines. 
(24) This, together with the above mentioned elements concerning the standing of the 
Philippines as analogue country, led the Commission to consider that the 
Philippines was an appropriate and not unreasonable choice. Interested parties 
were informed in due time of this proposed course of action. The main comments 
they have made in this respect are discussed below, as well as under recitals 28 to 
31. 
(25) The exporters concerned either agreed or did not react to the proposal to use the 
Philippines as the analogue country. 
11. 
(26) Within the time limit granted for comments regarding the choice of the analogue 
country, the importer having co-operated indicated that the Philippines would only 
constitute an appropriate choice if the data used would concern a Filipino producer 
manufacturing plastic body lighters and having no links with the Community 
industry. 
As concerns the alleged physical differences between plastic body and nylon body 
lighters, it has to be noted that the arguments put forward are identical to those 
raised in respect of the disposable flint lighters produced and sold by the 
Community industry in the context of the determination of the product under 
consideration and of the like product definition. As explained under recitals 12 to 
17 above, the Commission considered that all disposable flint lighters form one 
single category of product and that plastic body and nylon body disposable flint 
lighters have to be considered as like products. This conclusion is also valid in the 
context of the choice of the analogue country. With regard to the possible 
influence of existing links, the Commission considered that the examination set out 
in recital 23 above had provided ample evidence that, provided that normal value is 
based on domestic selling prices, the concern expressed was without foundation. 
This importer also suggested that Mexico be chosen as the analogue country. 
However, this proposal was made only in September 1994, i.e. more than five 
months after the deadline set for comments on this issue and could not, therefore, 
be considered without significantly impeding the investigation. 
12 
(27) The conclusion that the Philippines constitutes an appropriate and not 
unreasonable choice for the purpose of establishing normal value for the People's 
Republic of China in accordance with Article 2 (5) of the Basic Regulation is, 
therefore, confirmed. 
(ii) Claims for an application of Article 2 (6) of the Basic Regulation 
(28) Some interested parties claimed that normal value should have been established on 
the basis of Article 2(6) of the Basic Regulation, i.e. in accordance with the 
provisions applicable when a product is not imported directly from the country of 
origin but exported to the Community from an intermediate country, and that, in 
this context, normal value should have been established in the exporting country, 
i.e. Hong Kong. 
(29) It should be noted that only a limited number of Chinese exporters and one 
unrelated importer co-operated with the Commission. It so happens that the co­
operating companies either exported to or imported into the Community the 
Chinese lighters via Hong Kong. These companies represent around 53% of total 
exports to the European Community. As concerns the co-operating exporters 
located in Hong Kong, which represent around 13% of total exports of Chinese 
lighters to the European Community, the Commission has established that they 
also sell Chinese lighters on their domestic market. However, for the other 
companies (i.e. non-cooperating exporters whose importers did not co-operate), 
the "exporting route" was not known. 
13 
(30) In this context, the Commission is of the opinion that, as a general rule, the 
provisions of Article 2(6) are not applicable to imports originating in a non-market 
economy country. However, in the present case, it is likely that the vast majority 
of Chinese disposable flint lighters were simply transhipped in Hong Kong. 
Concerning the existence of production in the country of export, it would appear, 
according to information made available to the Commission, that there was no 
production of finished disposable flint lighters in Hong Kong during the 
investigation period. Finally, as far as sales prices in the country of export are 
concerned, since the lighters concerned are either manufactured in China under 
sub-contracting agreements or the parties involved are related, the Commission 
cannot be satisfied that these sales were made in the ordinary course of trade. 
(31) In view of the above, it is concluded that even if Article 2(6) were to be considered 
applicable to imports originating in a non-market economy country, it would not 
be appropriate in the context of the current investigation to establish normal value 
on the basis of the prices on the domestic market of the country of export, since 
there was no production of finished disposable flint lighters in Hong Kong and, 
additionally, no reliable comparable price would exist for these products in that 
territory. The normal value would thus have to be based on the prices on the 
domestic market of the country of origin. However, since the People's Republic of 
China is a non-market economy country, normal value must be established in 
accordance with Article 2(5) of the Basic Regulation. 
14 
(Hi) Domestic sales price on the Filipino market 
(32) The Commission considered whether normal value could be established on the 
basis of the prices at which the product is actually sold for consumption on the 
Filipino market, fa this respect, it was noted that the co-operating Filipino 
company sold its disposable flint lighters to several big customers, one of these 
customers being an independent distributor which resold the lighters to both 
retailers and wholesalers, another being a big tobacco company. The Commission 
also established that the sales prices allowed for a profit on sales (see recital 23 
above). 
It is therefore concluded that the domestic sales prices of the co-operating 
producer on the Filipino market constitute an appropriate basis for the 
establishment of normal value. 
(b) Export price 
(33) The Commission sent questionnaires to all exporters known from the two previous 
investigations concerning this product. Only the two exporters and one importer 
mentioned under recital 7, as well as one Chinese producer (namely Dong Guan 
Lighter Factory, Dong Guan City, People's Republic of China) submitted 
completed replies. 
15 
The total quantities reported by the co-operating exporters and the co-operating 
importer represent 53% of the total imports. For the remaining exports and in 
accordance with Article 7(7)(b) of the Basic Regulation, since Eurostat statistics 
contain price information based on a mix of different lighters (from the point of 
view of presentation, shape, size, etc.) and, therefore, not suitable for the purpose 
of establishing the export price and given the level of co-operation, the export 
price for the non-cooperating exporters was based on the average price of the co­
operating company with the lowest average price. At the same time, it was 
assumed that the fighters delivered by non-cooperating exporters were "naked" 
lighters sold in 50 unit packs (so-called "bulk'). 
(34) The co-operating exporters requested individual treatment (i.e. the establishment 
of separate export prices and thus of individual dumping margins). Although 
individual treatment may be given to certain exporters in non-market economy 
countries, in particular where they have demonstrated their independence from the 
State in the conduct of their export policy and in the fixing of their export prices, it 
was considered that the utmost prudence was required in this matter. 
In this respect, it has to be recalled that the newcomer review investigation 
referred to in recital 2 above concluded that no individual treatment could be 
granted to any of the four Chinese companies involved in the said investigation. 
Since that conclusion concerned, among others, the two companies having co­
operated in the current investigation and given that the companies in question did 
not submit any new substantiated evidence with regard to their claimed 
independence, the granting of individual treatment to the applicants was considered 
neither appropriate nor consistent with the Community Institutions' established 
approach. 
16 
(c) Comparison 
(35) Although all disposable flint lighters can be considered one single product, they are 
sold in different forms, i.e. naked, printed, sleeved, etc. The exports from China 
reported by co-operating companies consisted, by about 80%, of naked lighters in 
"bulk". Only small quantities exported concerned one or two side printed 
disposable lighters. For the purposes of the dumping calculation, only the normal 
value and the export price of naked lighters in bulk packing were compared. This 
approach was considered reasonable since naked lighters in bulk constituted the 
great majority of the exported quantities as reported by co-operating companies. 
(36) The importer having co-operated claimed that the lighters manufactured by the co­
operating Filipino company were not comparable with the Chinese lighters because 
they were made out of different material, i.e. the body of the Filipino lighter is 
made of nylon and the body of the Chinese lighter of plastic. With regard to the 
other parts, the same importer also claimed that differences existed and should be 
taken into account in the form of a price adjustment of 100%. This importer 
claimed that these physical differences resulted in a higher cost of production and 
thus have an impact on the selling price for the Filipino lighter when compared to 
the Chinese lighter. 
As concerns the material used for the manufacture of the body, the information 
available to the Commission showed that the type of raw material used by Chinese 
producers is indeed less costly per kilogram than the one used by the Filipino 
producer. However, the technical characteristics of the plastic body lighter 
indicate that the walls of the body are up to 2.5 times thicker than the walls of the 
nylon body lighter, and therefore that more material is used. In addition, the 
processing cycle is longer in the case of the plastic body lighter due to the longer 
period required for cooling. On balance, the difference in cost is thus negligible. 
17 
The Commission accepts that the parts used by the Chinese and the Filipino 
producers are not absolutely identical and that consequently the assembly process 
is not strictly identical. However, on the basis of the information made available to 
the Commission, an allegedly more sophisticated part and/or a slightly different 
part was not systematically more costly to produce than the corresponding 
allegedly less sophisticated one. Furthermore, no information was available to 
suggest that the alleged physical differences, which only negligibly affect costs, 
have an impact on sales prices. 
In these circumstances, it is concluded that no price adjustment is warranted to 
take account of alleged physical and/or qualitative differences. 
(37) For the purpose of ensuring a fair comparison, an adjustment to normal value was 
granted in respect of the domestic sales tax on the Filipino market. As far as the 
export price is concerned and where available, the actual freight, insurance and 
other costs were deducted to come to FOB level, otherwise a percentage 
corresponding to the latter deductions was taken. No further adjustment was 
claimed or considered necessary. 
Domestic sales prices in the Philippines and Chinese export prices were compared 
at the same level of sales, i.e. FOB national border. 
(d) Dumping margin 
(38) The dumping margin expressed as a percentage of the CIF Community frontier 
value of the imports was found to be 80.3%. 
18 
E. INJURY 
(a) General remarks 
(39) It should be stressed that the present review investigation was carried out further 
to a request from the Community industry alleging that dumping of Chinese 
disposable flint lighters had dramatically increased since the conclusion of the 
original investigation and claiming that the measures in force should be amended in 
order to remove further injury caused to the Community industry. 
Taking into account the provisions of Article 13(3) of the Basic Regulation, it was 
necessary to investigate the level of injury. In the original investigation, the 
injurious effects of Chinese dumped imports had been assessed and established 
cumulatively with imports from three other third countries. Accordingly, an injury 
investigation was also conducted with a view to establishing whether the increased 
dumping by the Chinese exporters had led to further injury which would warrant a 
modification of the measures in place in respect of the People's Republic of China. 
(b) Total Community consumption 
(40) In calculating total consumption of the product in question on the Community 
market, the Commission added Community producers' sales in the Community of 
disposable flint lighters to the total imports of these products into the Community, 
as declared under CN code 9613 10 00. On this basis, the total consumption has 
grown between 1989 (i.e. the investigation period of the original investigation) and 
1993 by 15%. 
19 
It is known, however, that the imports under CN code 9613 10 00 do not only 
cover disposable flint lighters but also disposable piezo lighters. The quantity of 
imported piezo lighters is not exactly known and, therefore, it is not possible to 
assess the consumption increase due to the imports of this type of disposable 
lighters. The Commission made an attempt to differentiate flint and piezo lighters 
in global import statistics on the basis of Taric statistics supposed to differentiate 
these two types of disposable lighters but no reliable historical data could be 
established on this basis. 
Nevertheless, as far as the People's Republic of China is concerned, it should be 
noted that the information available to the Commission showed that no piezo 
lighters were imported from that country up to and during the current investigation 
period. This means, as far as the People's Republic of China is concerned, that no 
over-estimation of its market share for disposable flint lighters could occur since all 
imports from China under that CN code related to imports of the product under 
investigation. 
(c) Factors relating to the dumped imports 
(i) Volume and market share 
(41) Between 1989 and the end of the investigation period, imports from China 
increased substantially when compared with 1989. Imported quantities were 
indeed 9.6 million units in 1989, then 69.3 in 1990, 78.1 in 1991, 45.5 in 1992 and 
71.6 million units in 1993 (investigation period adjusted to 12 months). 
20 
After a relative decrease in 1992 due to the imposition of measures in 1991, the 
imports increased by a much higher rate than consumption. Consequently, the 
market share of Chinese imports increased substantially, i.e. from 1.5% in 1989 to 
11% in 1991, then from 7% in 1992 to 10% in 1993 (investigation period adjusted 
to 12 months). 
(ii) Prices 
(42) In the context of this review investigation, it is extremely important to note that the 
export price of the Chinese lighters dropped by around 23% in the current 
investigation period when compared to the original investigation period (1989). In 
this respect, it should also be noted that this trend was established on the basis of 
figures reported by the co-operating exporters and the co-operating importer since, 
for the reasons stated in recital 33 above, Eurostat statistics were not suitable for 
the purpose of establishing export prices. 
(43) The prices of Chinese lighters were also compared with those of lighters produced 
in the Community and sold by the Community industry. As in the original 
investigation, the Commission considered that only those lighters with an equal or 
almost equal amount of gas, and therefore a similar quantity of ignitions, should be 
taken as a basis for this price comparison exercise, which was made on the basis of 
a representative percentage of sales, at the level of sales to wholesalers and large 
retailers. For the reasons stated in recital 36, which are also relevant in this 
context, no adjustment was applied to take account of other alleged physical 
and/or qualitative differences. 
(44) The sales price of the imported Chinese disposable lighters was, during the 
investigation period, significantly below the average sales price of the comparable 
disposable lighters produced by the Community producers. The weighted average 
margin of price undercutting was found to amount to 26% (expressed on the basis 
of Community sales price). 
21 
(d) Situation of the Community industry 
(i) General 
(45) The lighter market is very price sensitive. In order to be able to sell or to keep 
market share, the numerous producers and buyers on the market tend to adjust 
their prices to the lowest level possible. Faced with low priced dumped imports 
from the People's Republic of China, the Community industry was forced to lower 
its prices in order to try to maintain market share, production level and capacity 
utilisation. 
(ii) Production, sales and market share 
(46) Production and sales of the Community industry remained stable between the 
original investigation period and the current investigation period, despite a certain 
improvement noticeable in 1990 and 1991. However, over the same period, in a 
growing market, its market share decreased by 9 percentage points, while the 
market share held by Chinese imports grew by 8.5 percentage points. 
(Hi) Prices, profitability and employment 
(47) Prices of the Community industry have, on average, dropped when comparing the 
original investigation period with the current investigation period. A decrease in 
price was indeed the only means to keep the loss of market share to a minimum. 
Despite this decrease, the Community industry did not achieve this result. 
(48) Since the original investigation period the financial situation of the Community 
industry as a whole - after a certain improvement in 1991 - deteriorated up to the 
end of the current investigation period. The continued price fall could not be 
offset by reductions in costs. In 1993, the average sales price was below the 
average cost, including selling, general and administrative expenses. 
22 
(49) The Community industry has made considerable efforts to cope with the 
continuous decrease of prices, notably by reducing the number of its employees 
between the original investigation period and the current investigation period by 
13% but, at the same time, maintaining production and sales in order to remain 
viable. 
(e) Conclusion on injury 
(50) In these circumstances, it is concluded that the injury suffered by the Community 
industry has considerably worsened. In a growing market, the Community 
producers concerned have lost market share and their profitability has deteriorated 
in spite of severe cost reductions, including reduction of jobs. 
F. CAUSATION OF INJURY 
(51) The Commission examined whether the additional injury suffered by the 
Community industry was caused by the Chinese exporters' increased dumping and 
whether other factors may have caused or contributed to that injury. 
(a) Effect of the dumped imports 
(52) In examining the effects of the dumped imports, it was found that the increasing 
volume of the low priced dumped imports from the People's Republic of China 
coincided with the loss of market share, the price decreases and the deterioration in 
the financial situation of the Community industry. 
23 
(53) Indeed, between the original investigation period and the current investigation 
period the market share held by Chinese imports has considerably increased, 
namely from 1.5% to 10%, i.e. 8.5% of total consumption, while the Community 
industry's market share decreased by 9% of total Community consumption. During 
the same period, the level of undercutting by Chinese exports also increased from 
around 20% before the imposition of the measures to 26% in the current 
investigation period. 
Given that the market in question is highly price sensitive, as already explained in 
recital 45 above, it is clear that this substantial and increasing price undercutting by 
Chinese dumped imports, with consequentialy increased market share, has 
significantly affected the Community industry, both in respect of volumes sold by 
this industry on a market that was experiencing growth and on its selling prices, 
with the consequent impact on unit costs and profit. 
Given, in addition, that the dumping margin of Chinese imports has substantially 
increased during the same period, it is concluded that such heavily dumped imports 
have caused further injury to the Community industry concerned. 
(b) Effect of other factors 
(54) The Commission examined whether factors other than the dumped imports had 
caused or contributed to the material injury suffered by the Community industry, 
such as falling exports to third countries by the Community industry or an increase 
of imports from countries other than the People's Republic of China. 
(55) Between the original investigation period and 1993, exports to third countries by 
the Community industry showed an overall stable trend (in volume, index basis 
1989 = 100, 1990 amounted to 106, 1991 to 105, 1992 to 95 and 1993 to 100). 
This evolution cannot therefore be considered as a factor having adversely affected 
the Community industry. 
24 
(56) Imports from countries other than the People's Republic of China showed between 
1989 and the investigation period a stable market share at around 25% of total 
consumption. A more detailed analysis showed that certain countries have taken 
over traditional suppliers now subject to anti-dumping measures (other than the 
Chinese) and may have entered the market due to an aggressive pricing policy, 
which may have had an impact on the situation of the Community industry. 
This is confirmed by the recent lodging of a complaint and initiation of an anti­
dumping proceeding concerning imports of disposable flint lighters originating in 
certain third countries which were not involved in the original proceeding? 
However, the hypothetical existence of dumped imports from other third countries 
does not detract from the fact that Chinese imports, having dramatically increased 
their market share by increased undercutting and dumping, should be considered, 
in isolation, as a cause of further material injury to the Community industry. 
(57) One importer claimed that the introduction of new products such as the piezo 
disposable lighter and the flameless refillable lighter had adversely affected the 
Community industry by contracting demand and depressing prices for disposable 
flint lighters. However, these allegations were not supported by evidence 
indicating that purchases of these new products by Community consumers were 
replacing those of disposable flint lighters. In fact, it appears that the product 
concerned remained attractive, given the increased imports and consumption. 
(58) The same importer also claimed that the economic recession was one of the main 
reasons for the injury suffered by the Community industry. As a result, consumers 
were allegedly looking for the lowest priced lighter available. Prices have 
therefore dropped, it was argued, and the Chinese lighters become more attractive 
to consumers. 
SeeOJNoC67, 18.3.1995. p. 3. 
25 
While it is clear that Chinese dumped prices severely undercut the Community 
industry's prices and thus affected its pricing policy and profitability, no 
substantiated evidence of the alleged impact of the economic recession on the 
Community lighter market as a whole, and on the Community industry's situation 
in particular, has been provided. Indeed, while such impact, if any, would also be 
noticeable on the overall Community market, it should be stressed that the 
consumption of disposable flint lighters in the Community has increased (see recital 
40 above). In these circumstances, the argument that the economic recession 
would be responsible for the injury suffered by the Community industry cannot be 
accepted. 
(59) The same importer claimed that the difficult situation of the Community industry 
also related to the fact that, compared with refillable lighters, the disposable flint 
lighters it was producing were environmentally unfriendly products and that the 
increasing environmental awareness of consumers in the Commumty made it more 
difficult to sell such disposable products, on which governments were moreover 
considering the imposition of so-called "Ecb taxes". 
In this context, it is worth noting that although imported lighters are equally 
environmentally unfriendly, they remain the subject of intense trading. The 
consumption of disposable lighters in general also continues to increase. In 
addition, the above argument based on the increasing environmental awareness of 
consumers was not supported by any clear evidence that a significant proportion of 
the Community consumers was now showing a marked preference for refillable 
lighters. 
(60) Finally, this importer also claimed that any injury to the Community industry 
should be significantly diminished because the increase in imports from the People's 
Republic of China, noticeable in 1993, was due to developments on the Italian ancf 
U.K. markets, namely the abolition of excise taxes on disposable lighters which, 
until the end of 1992, were limiting the consumption of these products. 
26 
This argument cannot be accepted. Indeed, nothing explains why the abolition of 
excise taxes in the said Member States should result in an increase in imports 
which was significant with regard to products of Chinese origin only. In the 
absence of unfair trading practices, any competitive suppliers would have been able 
to enter, and compete on, the expanding Italian and U.K. markets. The fact that 
Chinese dumped imports gained a substantial share of the market in Italy and the 
U.K. underlines the specific impact of the Chinese dumped imports, which resulted 
in the Chinese achieving a larger market share by lower prices. These 
circumstances do not therefore warrant a modification to the findings regarding the 
causation of injury. 
(c) Conclusion on causation 
(61) In view of the above, it is evident that Chinese dumped imports have put a 
considerable downward pressure on disposable flint lighter prices in the 
Community market. 
The effect of other factors, such as imports from other third countries, on the 
injury sustained by the Community industry cannot be totally set aside. However, 
given the various elements set out above and especially the significant increase in 
quantities imported at dumped prices from the People's Republic of China, 
combined with the greater level of price undercutting by Chinese exporters, it is 
concluded that the dumped imports from the People's Republic of China have, 
taken in isolation, caused further injury to the Community industry, and that this 
injury was material. 
27 
G. COMMUNTTY INTEREST 
(62) In the previous investigations, the adoption of measures was considered to be in 
the interest of the Community. Since no new arguments have been made which 
could lead to a reconsideration of this position, the findings of Regulation (EEC) 
No 3433/91 in this respect are confirmed. 
^ H. DUTY 
(a) Injury elimination level 
(63) In the original investigation, for the purpose of establishing the injury elimination 
level, it was considered that any measure should allow the Community industry to 
cover its costs of production and to achieve a reasonable profit, namely 15% on 
sales turnover. This profit margin was considered as the minimum necessary to 
finance new investments in manufacturing facilities and research and development. 
It was also considered that the comparison should be restricted to those models 
with an equal or almost equal amount of gas, and therefore a similar quantity of 
ignitions. 
In the absence of any new substantiated argument in respect of the profit that the 
Community industry should be allowed to achieve, it was considered appropriate 
to follow the same approach in the current investigation as in the original 
investigation. For the reasons stated in recital 36,"which are also relevant in this 
context, it was considered that alleged physical differences, other than the amount 
of gas, should not be taken into account for the purpose of determining 
comparable models. 
28 
On the above basis, the comparison showed that, in order to eliminate injury, 
Chinese CIF prices would have to increase by 96.6%. 
(64) Since the injury elimination level is higher than the dumping margin, the duty 
should be based on the dumping margin found. 
(b) Form of the duty 
(65) Since prices of the Chinese imported disposable flint lighters steadily decreased 
after the imposition of the measures in 1991, it is highly foreseeable that an 
increased ad valorem duty would again lose its effectiveness within a relatively 
short time. Therefore, a simple amendment to the current ad valorem duty does 
not appear to be appropriate. The number of different types of lighters, i.e. naked, 
printed one side, printed two sides, one colour, multiple colours, etc., makes it 
virtually impossible to fix a minimum price level for disposable lighters. 
It is therefore considered appropriate to amend the measure in force by imposing a 
specific duty per lighter (namely 0.065 ECU per piece). In this respect, it has to be 
noted that by applying such a duty which stays within the limits of the dumping 
margin, the additional value of special features will not be penalised. In other 
words, no duty will be applied to the added value concerning printing or other 
special items which are at present very exceptional in the case of Chinese imports. 
29 
L PERIOD OF VALroiTY OF THE REGULATION 
(66) This Regulation should be considered as an amendment to Regulation (EEC) 
N° 3433/91 within the meaning of Article 15.(1) of Regulation (EEC) No 2423/88 
only insofar as the People's Republic of China is concerned. The measure imposed 
on imports from the People's Republic of China should, therefore, lapse after a 
period of five years starting from the date on which this Regulation enters into 
force, subject to the provisions of Regulation (EC) No 3283/948, 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. The first phrase of Article 1(2) of Regulation (EEC) N° 3433/91 shall be replaced 
by the following: 
"2. The rate of the duty, applicable to the net, free-at-Community frontier price 
before duty, or the amount of duty per lighter, shall be set as follows: " 
2. Paragraph (b) of Article 1(2) of Regulation (EEC) N° 3433/91 shall be replaced by 
the following: 
M(b) 0.065 ECU per lighter for the products originating iiithe People's Republic 
ofChina;" 
* OJ No L 349, 31.12.1994, p. 1. 
30 
Article 2 
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 
ISSN 0254?1475 
COM(95) 141 final 
DOCUMENTS 
EN 02 U 
Catalogue number : CB-C0-95-153-EN-C 
ISBN 92-77-87791-X 
Office fox Official Publications of the European Communities 
L-2985 Luxembourg