Proposal for a COUNCIL REGULATION (EC) amending regulation (EEC) nr 2455/93 imposing definitive antidumping duties on imports of monosodium glutamate originating in indonesia, the republic of Korea and Taiwan and collecting definitively the provisional duties imposed and terminating the proceeding with regard to Thailand
Date: 1996-01-11
Institutions: European Commission
Subjects: anti-dumping duty, chemical product, dumping, tariff exemption, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  11.01.1996 
COM(96)  1 final 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

amending Regulation (EEC) No 2455/93 imposing definitive anti-dumping duties on 

imports of monosodium glutamate originating in Indonesia, the Republic of Korea and 

Taiwan and collecting definitively  the provisional duties imposed and terminating the 

proceeding with regard to Thailand 

(presented  by  the  Commission) 

EXPLANATORY MEMORANDUM 

1. 

The  Council, by Regulation  (EEC) No  1798/90, as  amended  by Regulation  (EEC) 

No  2966/92  and  by  Regulation  (EEC)  No  2455/93,  imposed  definitive  anti 

dumping  duties on imports  of monosodium  glutamate  originating  in Indonesia, the 

Republic  of  Korea,  Taiwan,  and  Thailand  with  the  exception  of  imports  from 

certain  producers  in  these  countries  from  which  the  Commission  accepted 

undertakings. 

2. 

In  July  1994, the  Commission  initiated  a review  of  the  anti-dumping  measures  in 

force,  following  an application  lodged by the Community  industry. The  application 

alleged,  inter  alia,  that  the  existing  price-undertakings  had  been  violated  resulting 

in  renewed  financial  losses  for  the  Community  industry,  thereby  aggravating  the 

injury  suffered. 

3. 

In  the  course  of  the  review  investigation  the  Commission  found  that  there  were 

reasons  to believe  that  the  undertakings  were  being  violated  and  consequently,  by 

Regulation  (EC) No  1754/95 of  18 July  1995, replaced  the undertakings  previously 

accepted  from  Cheil  Foods  &  Chemicals  Inc.,  Miwon  Co.  Ltd.,  Ve  Wong 

Corporation, Tung Hai Fermentation  Ind. Corp., PT Indomiwon  Citra Inti and Thai 

Fermentation Industry Corporation by a provisional  anti-dumping duty. 

4. 

The  weighted  average  dumping  margins  found  ranged  from  14.1  to  32.7  for  the 

Republic of Korea, from  44.2 to 52.4% for Taiwan  and they amounted to 64.7% for 

Indonesia and Thailand. 

5.  As far  as Indonesia, Korea and Taiwan are concerned, it was found  that the dumped 

imports  caused  injury  to  the  Community  industry  and  that  the  imposition  of 

measures  was in the interest  of the Community.  As far  as Thailand  is concerned,  it 

was found  that the impact of exports from  this country  was negligible and that there 
was  no  indication  of  a  possible  resurgence  of  dumped  imports.  The  measures 
should therefore be repealed with regard to this country. 

6. 

The level of the definitive  duty was, with the exception  of one country, fixed  on the 

basis  of  the  injury  margins  as  these  were  lower  than  the  dumping  margins.  The 

duties range from 0.136 ECU/kg to 0.334 ECU/kg. 

7. 

It  is therefore  proposed  that  the  Council  adopts  the  Regulation  annexed  amending 
Regulation  (EEC) No 2455/93 imposing  definitive  anti-dumping  duties  on  imports 
of  monosodium  glutamate  originating  in  Indonesia,  the  Republic  of  Korea  and 

X 

The level of the definitive duty was, with the exception of one country, fixed on the 

basis  of  the  injury  margins  as  these  were  lower  than  the  dumping  margins.  The 

duties range from 0.131 ECU/kg to 0.334 ECU/kg. 

It is therefore proposed that the Council  adopts the Regulation annexed amending 

Regulation (EEC) No 2455/93 imposing definitive  anti-dumping  duties on imports 

of  monosodium  glutamate  originating  in  Indonesia,  the  Republic  of  Korea  and 

Taiwan and collecting  definitively  the provisional  duties imposed  and terminating 

the proceeding with regard to Thailand (see title of the regulation). 

A. a. 

COUNCIL REGULATION (EC) No 
of 
amending Regulation (EEC) No 2455/93 imposing definitive anti-dumping duties on 
imports of monosodium glutamate originating in Indonesia, the Republic of Korea and 
Taiwan and collecting definitively the provisional duties imposed and terminating the 
proceeding with regard to Thailand 

THE COUNCIL OF THE EUROPEAN UNION 

Having regard to the Treaty establishing the European Community, 

Having regard to Council Regulation  (EC) No 3283/94 of  22 December  1994 on protection 
against dumped imports from  countries not members of the European Community^), as last 
amended by Regulation (EC) No 1251/95(2), and in particular Article 23 thereof, 

Having regard to Council Regulation (EEC) No 2423/88 of  11 July 1988 on protection against 
dumped  or  subsidized  imports  from  countries  not  members  of  the  European  Economic 
Community(3), as last amended by Regulation  (EC) No 522/94(4), and in particular Articles 
12, 14 and 15 thereof, 

Having regard to the proposal from the Commission submitted after consulting the Advisory 
Committee, 

Whereas: 

C1) 
(2) 
(3) 
(4) 

OJ  No L  349,  31.12.1994, p. 1. 
OJ No L  122,02.06.1995, p. 1. 
OJ No L 209,02.0 8.1988, p.  1. 
O J N oL  66, 10.03.1994, p. 10. 

A  t 

I. PREVIOUS  PROCEDURE 

(1)  The Council, by Regulation (EEC) No  1798/90(5), as amended by Regulation  (EEC) No 
2966/92(6)  and  by  Regulation  (EEC)  No  2455/93(7),  imposed  definitive  anti-dumping 
duties  on  imports  of  monosodium  glutamate  originating  in  Indonesia,  the  Republic  of 

Korea,  Taiwan,  and Thailand  with  the  exception  of  imports  from  certain  producers  in 

these countries from which the Commission accepted undertakings by Regulation  (EEC) 
No 547/90(8), Decision 92/493/EEC(9) and Decision 93/479/EEC(10). 

II. REVIEW  INVESTIGATION 

(2)  By  a  notice  published  in  the  Official Journal of  the  European  Communities(n),  the 
Commission,  after  consulting  the  Advisory  Committee  and  in  accordance  with  Article 
14 of  Regulation  (EEC)  No  2423/88  (hereinafter  referred  to  as  the  Basic  Regulation), 
initiated  a  review  of  the  anti-dumping  measures  in  force,  following  an  application 
lodged by the Community  industry. 

The  application  alleged,  in particular,  that  the  normal  values  established  originally  had 

generally  increased,  while  the  export  prices  for  monosodium  glutamate  originating  in 

most  of the countries  concerned  had significantly  decreased  during  1993, thus  resulting 

in  increased  dumping  when  compared  to  the  original  findings.  It  was  also  alleged  that 

the monosodium  glutamate originating in the countries concerned  had been  imported  in 

the  Community  at  prices  lower  than  the  price  levels  contained  in  the  existing  price-

undertakings  and  that,  therefore,  the  price  undertakings  were  not  suitable  measures  in 

this  proceeding.  It  was  finally  alleged  that  the  aforementioned  facts  have  resulted  in 

renewed  financial  losses  for  the  Community  industry,  thereby  aggravating  the  injury 

suffered.  The  evidence  of  changed  circumstances  contained  in  the  application  was 

considered sufficient  to justify  the opening of a review  investigation. 

(5) 
(6) 
(7) 
(8) 
(9) 
(10) 
(n) 

OJ No L  167, 30.06.1990, p 
OJ No L 299,  15.10.1992, p 
OJ No L 225, 04.09.1993, p 
O J N oL  56, 03.03.1990,  p 
OJ No L 299, 15.10.1992, p 
OJ No L 225, 04.09.1993, p 
OJ No C  187, 09.07.1994, p 

1. 
1. 
1. 
23. 
40. 
35. 
13. 

(3)  The Commission  officially  advised  the complainant  Community  industry, the  exporters 
and  the  importers  known  to  be  concerned  and  the  representatives  of  the  exporting 
countries,  and  gave  the  parties  directly  concerned  the  opportunity  to  make  their  views 
known in writing and to request a hearing. 

(4)  The  Commission  sent  questionnaires  to  parties  known  to  be  concerned  and  received 
replies  to its questionnaires  from  the complainant  Community  industry, one  Indonesian 
producer  and  its  related  selling  company,  two  Korean  producers,  two  Taiwanese 
producers, one Thai producer and two importers in the Community. 

(5)  One Korean exporter, one Indonesian exporter, one important consumer of monosodium 

glutamate and the Fédération des Associations de l'Industrie  des Bouillons et Potages de 

la CEE requested and were granted a hearing. 

(6)  The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 

purposes  of  a  determination  and  carried  out  investigations  at  the  premises  of  the 

following  companies: 

(a) 

complainant Community producer. 

OrsanS.A. (France) 

(b) 

producers/exporters: 

Indonesia: 

PT Indomiwon Citra Inti 

PT Jico Argung (related selling company of PT Indomiwon Citra Inti) 

Republic of Korea: 

Cheil Foods & Chemicals Inc. 

Miwon Co. Ltd. 
Miwon  Trading  &  Shipping  Co.,  Ltd.  (related  selling  company  of  Miwon 
Co. Ltd.) 

Taiwan: 

Ve Wong Corporation 

Tung Hai Fermentation Ind. Corp. 

Thailand: 

Thai Fermentation Industry  Corporation 

(c) 

importers: 

GMS-Chemie-Handelsgesellschaft  mbH (Germany) 

(7)  As  Thai  Fermentation  Industry  Corporation  submitted  a  deficient  response  to  the 
Commission's  questionnaire  and  refused  to  co-operate  in  the  verification  of  the 
information  it submitted, in accordance with Article 7(7)(b) of the Basic Regulation, the 
findings  had to be based on the facts available. 

(8)  The  investigation  of  dumping  covered  the  period  from  1 May  1993  to  30  April  1994 

(hereafter  the 'investigation period'). 

III.  CONTINUATION  OF EXISTING  MEASURES 

(9)  •  As the review  investigation  was still  in progress beyond  the normal  period  of expiry of 
the  measures,  the  Commission  gave  notice(12),  in  accordance  with  Article  15(3)  of  the 
Basic  Regulation,  that  the  measures  concerning  monosodium  glutamate  originating  in 

Indonesia, the Republic  of Korea, Taiwan  and Thailand  would remain  in force  after  the 

end of the relevant five-year  period, pending the outcome of the review. 

(l 2) 

OJ No C  164, 30.06.1995, p.  7. 

IV. PROVISIONAL  MEASURES 

(10)  In the course of the review investigation  the Commission  found  that there were reasons 

to  believe  that  the  undertakings  referred  to  in  recital (1)  were  being  violated  and 
consequently,  by  Regulation  (EC)  No  1754/95  of  18  July  1995(13),  withdrew  its 
acceptance of the undertakings previously  accepted from  Cheil Foods & Chemicals Inc., 

Miwon  Co.  Ltd.,  Ve  Wong  Corporation,  Tung  Hai  Fermentation  Ind.  Corp.,  PT 

Indomiwon  Citra Inti and Thai Fermentation  Industry  Corporation,  and imposed  instead 

a provisional anti-dumping duty. 

(11)  By  Regulation  (EC)  No  2678/95(14), the  Council  extended  the  validity  of  these  duties 

for a period of two months. 

V.  SUBSEQUENT  PROCEDURE 

(12)  Following  the  imposition  of  the  provisional  anti-dumping  duties,  Cheil  Foods  & 

Chemicals  Inc., Miwon  Co. Ltd., PT Indomiwon  Citra Inti  and Tung  Hai  Fermentation 

Ind.  Corp.  made  their  views  known  in  writing.  Parties  who  requested  were  granted  a 

hearing by the Commission. 

(13)  The  Commission  continued  to  seek  and  verify  all  information  it  deemed  necessary  for 

its  definitive  findings.  In  particular,  further  investigations  were  carried  out  at  the 

premises of the following  importers: 

DCT Chemie B.V.  (Netherlands) 

Henry Lamotte GmbH (Germany) 

Quimidroga S.A.  (Spain) 

Scanchem Ltd. (United  Kingdom) 

Superfos  Chemicals A/S (Denmark) 

Tang Frères (France) 

VOS B.V. (Netherlands) 

(13) 
(14) 

OJ No L  170, 20.07.1995, p.  4. 
OJ No L 275, 18.11.1995, p. 22. 

(14)  The  parties  were  informed  in  writing  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  collection  of  the  amounts  secured  by  way  of  a  provisional  duty.  The 
parties  were  also  granted  a  reasonable  period  within  which  to  make  representations 
subsequent to the disclosure. 

The  oral  and  written  comments  presented  by  the  parties  were  considered  and,  where 

appropriate, the Commission's findings  were modified  to take account of them. 

(15)  The  investigation  exceeded  the  period  of  one  year  mentioned  in  Article 7(9)(a)  of  the 
Basic  Regulation  due  to  the  unusual  complexity  of  this  case.  As  indicated  above, 
verifications  were carried  out at the premises of seven  importers, the need to obtain  and 
verify  additional information  only arising at an advanced stage of the investigation. 

VI. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

1. Description of the product concerned 

(16)  The  product  covered  by  the  complaint  and  for  which  the  review  investigation  was 

initiated  is monosodium  glutamate produced  in the form  of crystals of various  sizes and 

falling  within  CN  code  ex  2922 42  10. It  is  mainly  used  as  flavour  enhancer  in  soups, 

broths,  fish  and  meat  dishes  and  ready  made  foods.  The  product  is  the  same  as  that  in 

the Regulation  under review. 

(17)  Monosodium  glutamate  is  available  in  various  packing  sizes,  ranging  from  consumer 

packs of 0,5 gram to  1000 kilo bulk bags. Smaller packing  sizes are sold via retailers  to 

private consumers, while the larger sizes of 25 kilo and  more  are destined  for  industrial 

users. However, there are no differences  in the characteristics  of monosodium  glutamate 

packed in the various sizes. 

2. Like product 

(18)  It was found  that the conclusions  of the Regulation  under review  are still valid  and that 
monosodium  glutamate  produced  and  sold  by  the  Community  industry  on  the 
Community  market  is  a product  alike  to  that  produced  in  and  exported  from  the  four 
countries in question to the Community. 

VII. DUMPING 

1. Preliminary  remark 

(19)  With  regard  to  Thai  Fermentation  Industry  Corporation,  it  should  be  noted  that  this 

company  which  was  the  sole  producer  in  Thailand  having  submitted  information, 

although  incomplete,  in  response  to  the  Commission's  questionnaire,  refused  to  co 

operate  in  the  verification  of  this  information.  In  addition,  none  of  the  co-operating 

importers  was  supplied  by this company.  In these  circumstances,  it  was  not  possible  to 

make  an  individual  finding  for  this company,  and  findings  concerning  Thailand  had  to 

be based on the facts available as described in recital (33). 

2. Normal value 

a. General 

(20)  For  all  the  exporting  countries  concerned,  normal  values  were  established  for  the 

relevant  product  types exported  to  the  Community  during  the  investigation  period,  i.e. 

on the basis of packing sizes of 25 kilo bags. 

b. Indonesia 

(21)  For  the  co-operating  Indonesian  producer  normal  value  had  to  be  constructed  in 

accordance  with  Article  2(3)(b)(ii)  of  the  Basic  Regulation,  since  almost  all  of  its 

domestic sales were made at a loss during the investigation  period. 

(22)  The  constructed  normal  value  was  based  on  the  company's  own  manufacturing  costs 
incurred  during  the  investigation  period,  in  accordance  with  Article  2(3)(b)(ii)  of  the 
Basic  Regulation.  To  these  costs,  an  amount  corresponding  to  the  company's  own 
selling,  general  and  administrative  (SG&A)  expenses  was  added.  In the  absence of  any 
information  on  profits  by  other  Indonesian  producers  of  the  like  product  or  in  similar 
business  sectors,  it  was  considered  that  the  average  profit  realised  during  the 
investigation  period  by  all  other  co-operating  exporters  on  their  domestic  sales  of  the 
like product  made in the ordinary  course of trade would  form  the most  reasonable  basis 
on  which  to  determine  profit,  since  the  structure  of  the  markets  concerned  were  to  a 
large extent  similar to that in Indonesia. 

c. Republic of Korea 

(23)  For the two Korean producers which replied to the Commission's questionnaire, normal 

value was established, in accordance with Article 2(3)(a) of the Basic Regulation, on the 

basis of the price actually paid in the ordinary  course of trade for  domestic  sales of  the 

like product, which were made in sufficient  quantities to permit a proper comparison. 

d. Taiwan 

(24)  For  the  two  Taiwanese  producers  which  replied  to  the  Commission's  questionnaire, 

normal  value  was  established,  in  accordance  with  Article  2(3)(a)  of  the  Basic 

Regulation,  on  the  basis  of  the  price  actually  paid  in  the  ordinary  course  of  trade  for 

domestic  sales of the like product, which were made in sufficient  quantities  to permit  a 
proper comparison. 

2. Export price 

(25)  Export prices reported by all co-operating  producers  in Indonesia,  Korea and Taiwan  in 

their  replies  to  the  Commission's  questionnaire  corresponded  to  the  price  levels  of  the 

price  undertakings.  However,  a  verification  of  these  export  prices  confirmed  the 

allegation  in  the  review  application  that  the  price  undertakings  had  been  violated  and 

that the export prices reported were unreliable. 

(26)  The  above  conclusion  was  reached  after  consideration  of  the  following  facts:  the 

Commission requested information  on resale prices for the product concerned as well as 

information  on  the  costs  between  importation  and  resale  from  all  importers  having 

purchased  monosodium  glutamate  from  those  exporters  which  co-operated  in  this 

review. 

A number of importers supplied the requested information  on resale prices and costs and 

this  information  was  verified  at  the  premises  of  those  importers  which  agreed  to  co 

operate  further  in  the  investigation.  It was  found  that  these  latter  importers,  which  had 

sourced  the product  concerned  from  the co-operating  exporters  in  Korea, Indonesia  and 

Taiwan,  had  all  sold  the  product  concerned  on  the  Community  market  at  a loss  during 

the  period  investigated  and,  in  some  cases,  the  resale  price  did  not  even  cover  the 

purchase  price.  This  was  a  regular  pattern  of  pricing  behaviour,  spanning  the  entire 

investigation  period,  for  which  no convincing  reason  could  be  advanced  other  than  the 

existence  of  compensatory  arrangements.  In  addition,  clear  evidence  was  found  during 

the  verification  visits  to  certain  importers  that  the  undertakings  accepted  from  Miwon 

Co. Ltd.  (Korea) and PT Indomiwon  Citra Inti (Indonesia)  had been violated, i.e that the 

import prices were not at the level of the price undertakings  as demonstrated. In the case 

of  the  Indonesian  company,  the  violation  was  evidenced  by  the  issue  of  credit  notes 

relating to sales of the product concerned  and, in the case of the Korean company, on the 

existence  of  correspondence  referring  to  prices  substantially  below  the  undertaking 

price.  The  above  facts  alone  show  that  the  actual  export  prices  for  the  transactions 

concerned  were significantly  lower than those reported at the undertaking price level. 

In  the  above  circumstances,  which  strongly  support  the  existence  of  compensatory 

arrangements  and  the  unreliability  of  export  prices  reported,  it  was  concluded  that  the 

export  prices  reported  by  the  co-operating  exporters  should  be  reconstructed  in 

accordance  with  Article 2(8)(b) of the Basic  Regulation  i.e. on  the basis of  the prices at 

which  the  imported  product  was  first  sold  to  independent  customers,  allowance  being 

made  for  all  costs  incurred  between  importation  and  resale  and  for  a reasonable  profit 

margin  for the importers  concerned. 

(27)  Accordingly,  for  the co-operating  exporters  in  Korea, Taiwan  and  Indonesia,  the export 

price  was  constructed  by  deducting  from  the  weighted  average  resale  prices  of  each  of 

the  co-operating  importers  to  the  first 

independent  customer,  an  amount  which 

corresponded  to the importers' costs between  importation  and  resale  plus  an amount  for 

profit  of  5%. This amount of profit  was considered  reasonable  as it was in line with that 

considered  appropriate  for  the product concerned  in previous  investigations  and was not 

contested.  An  additional  deduction  was  made for  customs  duty  and  other  costs, such  as 

ocean  freight  and insurance, to arrive at an ex-works level in the countries of origin. 

(28)  For those transactions by the co-operating producers for which information  on resales by 
importers could not be obtained,  it was concluded that, in the light of the facts  revealed 
by the  verification  of  resale  prices  of  MSG  exported  by  those  producers  carried  out  at 
the seven importers referred  to above, the export prices submitted by exporters had to be 
disregarded  for  the  above  same  reasons.  The  export  price  therefore  had  to  be 
established,  in  accordance  with  Article 7(7)(b)  of the  Basic  Regulation,  on the basis of 
the facts  available, i.e. it was considered  that  actual export prices in these cases were at 
the same level as the export prices reconstructed as described in recitals (25) to (27). 

3.  Comparison 

(29)  The weighted  average normal value of 25 kilo bags, for each co-operating  exporter,  was 
compared  with  the  export  price  established  as  described  in  recitals (25)  to  (28)  at  the 
same level of trade and on an ex-works basis. For the purpose of a fair  comparison,  due 
allowance  was  made  for  the  differences  in  selling  expenses  claimed  to  affect  price 
comparability  for  which  satisfactory  evidence  was  submitted.  Adjustments  were  made, 
in  particular,  in  respect  of  transport,  insurance,  handling,  loading  and  ancillary  costs, 
packing costs, credit and salesmen's salaries. 

4. Dumping margins 

(30)  The  comparison  showed  the  existence  of  dumping  margins, being  equal  to  the  amount 
by  which  the  normal  value,  as  established,  exceeded  the  price  for  export  to  the 
Community. 

(31)  The weighted  average dumping  margin  for  each producer,  expressed  as a percentage of 

the free-at-Community-frontier  price, is as follows: 

Indonesia 

- PT Indomiwon Citra Inti: 

64.7% 

Republic of Korea 

- Cheil Foods & Chemicals Inc.: 
-Miwon  Co. Ltd.: 

13.3% 
32.7% 

10 

Taiwan 

- Tung Hai Fermentation Ind. Corp.: 

- Ve Wong Corporation: 

44.2% 

52.4% 

(32)  For  those  producers  in  Indonesia,  Korea  and  Taiwan  which  neither  replied  to  the 

Commission's  questionnaire  nor  otherwise  made  themselves  known,  the  dumping 

margin  was  determined  on  the  basis  of  the  facts  available  in  accordance  with 

Article 7(7)(b) of the Basic Regulation. In this respect, it was considered, in the light of 

the  proportion  of  the  total  imports  into  the  Community  covered  by  the  co-operating 

producers in each of the three countries concerned, that the findings  made with regard to 

these  companies  provided  the  most  appropriate  basis  for  the  determination  of  the 

dumping margin. 

On  this basis  it was concluded  that it would  provide  a bonus  for  non-co-operation,  and 

might  lead  to  circumvention  of  anti-dumping  measures,  should  any  of  the  producers 

concerned  be deemed  to have dumped  at levels lower than  the highest  dumping  margin 

found  for any producer in the exporting country concerned which had co-operated. 

It  was,  therefore,  considered  appropriate  to  use,  for  the  non-co-operating  producers 

concerned,  the  highest  dumping  margin  found  for  a  co-operating  producer  in  the 

respective country, i.e. 64.7% for Indonesia, 32.7% for Korea and 52.4% for Taiwan. 

(33)  As  far  as  Thailand  is  concerned,  and  for  the  reasons  described  in  recital (19),  it  was 

considered  appropriate,  given  the absence  of any co-operating  producer  in this  country, 

to  base  the  country-wide  dumping  margin  on  the  highest  margin  found  for  any  co 

operating producer in one of the other countries, i.e. 64.7%. 

11 

VIIL  INJURY 

Preliminary  remark 

(34)  In  accordance  with  Article  14  of  the  Basic  Regulation,  the  investigation  sought  to 
determine  the extent  of  any changes  in the circumstances  established  in  the  Regulation 
under review with regard to the behaviour of the exporters on the Community market or 
the  situation  of  the  Community  industry.  Since  the  original  five-year  period  of  validity 
of  the  measures  being  reviewed  would  normally  have  lapsed,  the  question  of  the 
likelihood of injury  recurring in the absence of measures was also examined. 

The  examination  of  the  injury  trends  covered  the  period  from  1991  to  1993  and  the 
investigation  period. 

A.  Community  industry 

(35)  The  complainant  Community  producer  is  the  sole  producer  of  the  like  product  in  the 

Community  and,  consequently,  represents  total  Community  production  of  the  product 

concerned.  Therefore,  it  constitutes  the  Community  industry  in  the  meaning  of  Article 

4(5) of the Basic Regulation. 

B.  Situation of the Community  industry 

(36)  As  there  is  only  one  Community  producer  of  the  product  concerned  and  due  to  the 

confidential  nature of the information  relating to injury  indicators, the figures  describing 

the development  of production, capacity, capacity  utilisation,  Community  consumption, 

sales  volume,  market  shares,  price  evolution  and  profitability  are  given  in  the  form  of 

indices, starting from  a base of  100 for  1991 figures. 

Production,  capacity and capacity utilisation 

(37)  Production  by  the  Community  industry  of  the  product  concerned  decreased  in  1992  to 

97.58,  but  recovered  slightly  in  1993  to  98.58.  During  the  investigation  period, 

Community  production  achieved  101.08. 

12 

The  Community  industry's  production  capacity  for  the  product  concerned  remained  by 

and large stable. The capacity decreased in  1992 to 99.8 and thereafter  increased in  1993 

to  101.76  and  during  the  investigation  period  to  103.72.  Between  1991  and  the 

investigation period the capacity utilisation rate varied between  100 and 96.88. 

Community consumption 

(38)  Community  consumption  was stable during the period examined.  It was, on an  indexed 

basis,  100 in  1991 and decreased'to 96.83 in  1992. In  1993, it increased  to  101.08  and 

decreased subsequently to  100.25 during the investigation period. 

Sales volume and market share 

(39)  The Community industry's sales volume in tonnes dropped from  100 in  1991 to 93.21 in 

1992.  In  1993,  the  quantity  sold  was  107.36  and  during  the  investigation  period  it 

decreased slightly to 106.12. 

The market share of the complainant  Community producer dropped, also on an indexed 

basis,  from  100 in  1991, to  92.43  in  1992, increased  to  102.73  in  1993  and  fell  again 

slightly  to  102.28 during  the  investigation  period.  It  should  be  noted,  however,  that  its 

market share was at all times very substantial. 

Price evolution 

(40)  Although  the  Community  industry's  sales  prices  increased  slightly  to  101.66  in  1992, 

they  fell  substantially  in the following  year to 95.13. The  situation  improved  somewhat 

during the investigation period as the prices recovered to 95.91. 

13 

Profitability 

(41)  At  the  outset,  it  should  be  noted  that,  despite  the  anti-dumping  measures  in  force,  the 

profitability  of  sales  by  the  Community  industry  of  the  product  concerned  was  at  no 

time  during  the  period  examined  at  a  satisfactory  level,  although  the  Community 

industry  had  achieved  a  reduction  in  costs  of  production.  Indeed,  the  Community 

industry's  actual level of profitability  was not only far below the level considered by the 

Regulation  under review  as appropriate, as evidenced by the request  for  a review  of the 

undertakings  submitted  by  Community  industry  in  1992, but  remained  so  low  over  an 

extended  period  of  time  that  the  industry's  viability  was jeopardized.  The  already  low 

level  prevailing  in  1991  underwent  a  further  sharp  decrease  in  1992.  The  downward 

trend  continued  in  1993,  when  the  Community  industry  came  very  close  to  a  loss-

making  situation.  The  investigation  period  saw  some  improvement  of  profitability 
which  did  not,  however,  reach  the  level  of  1991.  When  considering  profitability,  it 

should  also  be  borne  in  mind  that,  as  mentioned  above,  its  decline  would  have  been 

even more significant  had the Community producer not  achieved  a reduction  in costs of 

production. 

Conclusion 

(42)  The examination  of the above-mentioned  indicators  shows  that, notwithstanding  certain 

positive  effects  of  the  anti-dumping  measures  currently  in  force,  the  financial  situation 

of the Community  industry remains precarious. While material injury  was established by 

the  Regulation  subject  to review  for  the period  from  January  1989 to  September  1992, 

the examination of the facts established  in the current review demonstrates that  material 

injury  has persisted  in the subsequent  period. This is  shown  in particular  by the  further 

decrease inof prices and the persistent extremely low level of  profitability. 

14 

B.  Behaviour of the exporters concerned 

Volume of imports 

(43)  The  volume  of imports  from  the four  countries concerned increased  from  11228 tonnes 

in  1991  to  12871 tonnes  in  1992, but  decreased  thereafter  to  7921  tonnes  in  1993  and 

7478 tonnes in the investigation  period. With  the exception  of Thailand, the imports of 

the product concerned broken down by the four countries involved, follow, by and large 

a  similar  pattern  to  the  development  of  total  imports  of  monosodium  glutamate  from 

Indonesia, Korea, Taiwan and Thailand. They represented the following  market shares: 

1991 

1992 

1993 

Indonesia 
Korea 
Taiwan 

Thailand 

2.99% 
9.94% 
7.56% 

0.70% 

3.55% 
12.34% 
8.55% 

0.64% 

3.21% 
6.78% 
4.61% 

0.18% 

Investigation 
period 
2.34% 
7.39% 
4.24% 

0.10%' 

This represents  a development  of the  total  market  share  of  the imports  concerned  from 

21.18%  in  1991 to 25.07% in  1992 with  a subsequent  decrease  to  14.78% in  1993 and 

14.07% in the investigation  period. 

Prices of the dumped imports 

(44)  It  was  investigated  whether  the  exporting  producers  had  undercut  the  prices  of  the 

Community  industry during the investigation period.  A comparison was therefore  made 

on the basis of the constructed  weighted  average export price (CIF Community  frontier, 

duty paid) as established  in recitals (25) to (28) and the Community  industry's  weighted 

average ex-works selling price for monosodium glutamate sold in the Community. 

15 

The  level  of  undercutting  of  the  Community  industry's  prices  was  found  to  range 

between  20 and 22% for imports originating in Taiwan, between 9 and  11%  for  imports 

originating in the Republic of Korea and 26% for imports originating in Indonesia. With 

regard  to  the  Thai  exporter,  it  was  not  considered  possible  to  calculate  undercutting 

given the fact  that, as set out in recital  (19), they did npt co-operate in the  investigation. 

In  view  of  the  conclusion  reached  on  the  existence  of  compensatory  arrangements, 

entered  into  by  the  co-operating  exporters  (see  recital  (26)),  EUROSTAT  figures 

concerning imports from Thailand could also not be considered as a reliable source. 

Conclusion 

(45)  Although  the market penetration  of imports from  the countries concerned  has decreased 
considerably,  their  market  share  has  remained  substantial,  and  a clear  pattern  of  price 
undercutting has emerged. 

C.  Cause of injury 

1. Cumulation 

(46)  As  far  as  imports  from  Thailand  are  concerned,  it  was  concluded  that  these  imports, 
whose  market  share  decreased  to  0.1  %  in  the  investigation  period,  should  not  be 
analysed  cumulatively  with  imports  of  the  other  countries  concerned  with  a  view  to 
determining their effect  on the situation of the Community industry as such a low import 
volume could not have any serious impact on the latter. 

As  in  the  original  investigation  and the  reviews  carried  out prior  to this  review,  it  was 
found  that  the  effects  of  the  imports  from  Korea,  Taiwan,  and  Indonesia  have  to  be 
analysed cumulatively,  since the imports  of the product under consideration  originating 
in  each  of  these  countries  are  alike  in  all  respects,  interchangeable  and  followed  the 
same pricing behaviour. These imports competed with the like product manufactured  by 
the Community  industry and with each other. 

16 

2. Effect of the dumped imports from the countries concerned 

(47)  In  determining  whether  any changes  had  occurred  in  the  causal  link  established  by  the 

Regulation  and the Commission decision subject  to review between the dumped imports 

and  the  material  injury,  the  further  developments  since  these  earlier  findings  were 

examined.  While  some  of 

the  Community 

industry's 

indicators 

improved, 

its 

performance  remained  poor  in  particular  regarding  its  price  level,  which  fell  after  the 

imposition of the measures, and its continuing low profitability.  The latter can clearly be 

linked  to  the  pricing  behaviour  of  the  exporters  as  established  in  recitals  (25)  to  (28) 

which through price undercutting  in a price sensitive  market  managed  to maintain  their 

pressure on the prices of the Community industry. 

(48)  Taking this into consideration as well as the fact,  as was outlined above, that the volume 
of  imports  from  the  three  countries  concerned  remained  at  a  substantial  level,  there 
cannot  be  any  reasonable  doubt  that  these  imports  have  been  a  decisive  factor  on  the 
Community industry's continuing poor financial  situation. 

In conclusion,  although certain improvements  occurred  in the Community  industry, it is 

still  experiencing  overall  material  injury  as a result  of  the  behaviour  of  the  Indonesian, 

Korean  and  Taiwanese  exporters  which,  through  price  undercutting,  could  not  fail  to 

affect  severely an industry in the process of recovering from  dumping. 

3. Effect  of other factors 

(49)  The impact on the situation of the Community industry of factors  other than the dumped 

imports concerned was also examined. 

17 

Imports from Brazil 

(50)  It  was  alleged  that  the  Community  producer  imported  substantial  quantities  of  the 

product concerned from  Brazil at prices with which exporters from  the four countries in 

question  were  prevented  from  competing.  It  was  found  that  the  Community  producer 

imported monosodium  glutamate from Brazil during the investigation  period in order to 

meet  a sudden  surge  in  demand  and  to  counteract  the  effects  of  industrial  action.  The 

Community  producer's  imports  only  however  represented  a  small  proportion  of  its 

output.  Consequently, the purpose  of these imports by the Community producer was to 

defend  its  competitive  position  in  the  Community  and  to  maintain  its  market  share. 

Moreover, contrary to the above allegation, these products were imported and resold at a 

price level which was comparable with the Community  producer's own production  costs 

and selling prices respectively. 

(51)  Some  interested  parties  claimed  that  imports  of  monosodium  glutamate  from  Brazil 

were the reason for the difficult  situation of the Community  industry. 

It  was  found  that,  while  imports  originating  in  Brazil  increased  substantially  over  the 

period  examined  (from  1076  tonnes  in  1991  to  4376  tonnes  during  the  investigation 

period), the price levels of these imports, on the basis of information  from  EUROSTAT, 

increased  slightly.  Even  if  it  were  to  be  concluded  that  imports  from  Brazil  had 

contributed  to  the  injury  suffered  by  the  Community  industry,  this  would  not  alter  the 

fact  that  the  injury  caused  by  the  dumped  imports  concerned,  taken  in  isolation,  is 

material. 

18 

Imports from  the United States of America 

(52)  One  party  claimed  that  imports  of  monosodium  glutamate  from  the  United  States  of 

America might be responsible for the difficult  situation of the Community  industry. 

It was found, however, that imports from  the United States of America during the period 

examined remained at negligible levels (23 tonnes in  1991 and 27 tonnes in  1993 and, in 

terms of market shares, 0.04% in  1991 and 0.05% in  1993) and were sold at prices well 

above those of the dumped imports. It was, in addition, claimed by the complainant  that 

imports  originating  in  the  United  States  of  America  surged  in  July  and  August  1994. 

This  development,  however,  took  place  after  the  investigation  period  and,  therefore, 

could  not  be  taken  into  consideration,  in  conformity  with  the  Community  institutions' 

consistent practice, for the purpose of the present injury  determination. Indeed, the  final 

determination  of  the  facts  in  an investigation  always  refers  to  the  investigation  period. 

Developments,  which  occurred  after  the  end  of  this  period,  can  not  be  taken  into 

consideration  since  any  other  method  would  render 

the  investigation  virtually 

permanent,  so  that  operators  concerned  could  manipulate  the  results  by  short-lived 

changes  of  the  pricing  policy. Finally,  neither  the Basic  Regulation  nor  the  Agreement 

on Implementation  of Article VI of GATT  1994 warrant another method. 

Therefore,  imports  from  the  United  States  of  America  could  not  have  had  any 
significant  negative impact on the situation of the Community  industry during the period 
considered which ended in April  1994. 

Other imports 

(53)  The  effects  of  imports  other  than  those  from  Brazil,  the  USA  and  the  four  countries 

concerned  on  the  Community  industry  were  also  examined  on  the  basis  of  the  figures 
reported  by  EUROSTAT.  These  imports,  made  mainly  from  Switzerland,  Austria, 
China,  Japan  and  Hong  Kong,  were,  with  the  exception  of  Hong  Kong,  usually  at 
significantly  higher prices than  those  from  the four  countries  concerned.  The  quantities 
imported  from  Hong Kong were, in any event, very low. In this context,  it is  interesting 
to  note  that  neither  Switzerland,  Austria  nor  Hong  Kong  had  any  production  facilities 
for monosodium  glutamate. 

19 

In  these  circumstances,  it  can  be  ruled  out  that  these  other  imports  have  had  any 
significant  adverse impact on the situation of the Community  industry. 

Mismanagement of the Community industry 

(54)  One importer and the Fédération des Associations de l'Industrie des Bouillons et Potages 

de  la  CEE  alleged  that  the  Community  industry  used  outdated  technology  in  order  to 

produce  the  product  concerned.  It  was  also  alleged  that  the  injury  sustained  by  the 

Community industry was due, at least in part, to the Community industry's own  deficient 

management and know-how. 

However,  these  allegations  were  not  substantiated  and,  therefore,  had  to  be  rejected. 

They  were  also contradicted  by the Commission's  own  findings  on the productivity  and 

efficiency  of the Community industry, as shown by its successful  rationalization  efforts. 

4.  Conclusion 

(55)  In  these  circumstances,  it  was  concluded  that,  even  if  it  was  accepted  that  the  factors 
mentioned  above had an adverse effect  on the situation  of  the Community  industry, the 
dumped  imports  from  Indonesia,  Korea,  and Taiwan  had,  taken  in  isolation,  continued 
to cause material injury to the Community industry. 

D.  Recurrence of injury 

(56)  In  the  light  of  the  above  analysis  and  in  order  to  assess  the  effect  of  expiry  of  the 

measures in force, the following  was considered: 

(57)  -  As far  as Thailand  is concerned,  as stated  in recital  (46), the impact of exports  from 
this  country  is  negligible  and  there  is  no  indication  of  a  possible  resurgence  of 
dumped imports.  The measures should therefore  be repealed. 

20 

-  Monosodium  glutamate  is  a  commodity  and  price  is  the  key  factor  in  customer 
choice,  all  customers  being  industrial  users.  Sales  at  low  prices  have  therefore 
inevitable  substitution  effects  as  certain  customers  choose  to  be  supplied  at  the 
lowest price  offered, 

-  Undercutting  margins  of  up  to  26%  have  been  established.  These  injurious  prices 
would most likely persist in the future  and would continue to prevent the Community 
industry  recovering  from  injury,  the  situation  of  which  would  be  further  aggravated 
should the anti-dumping measures currently in force not be continued, 

-  Further evidence of the need for the Community  industry  to continue to be protected 

against  injurious  dumping  is  the  behaviour  of  the  exporters  which  led  to  the 

withdrawal  of  the  undertakings  by  the  Commission.  Export  prices  reported  by  the 

exporters  had  to  be  considered  as  unreliable  because  of  low  resale  prices  on  the 

Community  market  which  can  only  be  explained  by  the  existence  of  compensatory 

arrangements.  The  likelihood  of  injurious  dumping  recurring  is  also  confirmed  by 

information  received  by  the  Commission  concerning  exports  of  monosodium 

glutamate  originating  in  the four  countries  concerned  which  were  made  to the  three 

new Member  States before  their Accession.  These exports  were  found  to have been 

made  at  prices  substantially 

lower  than  the  price  level  in  the  Community, 

demonstrating the propensity for dumping by the countries concerned. 

(58)  Under  these  circumstances  it  is  concluded  that  the  injury  already  suffered  by  the 
Community  industry and caused by dumped imports from  Korea, Taiwan, and Indonesia 
could only worsen if measures were allowed to lapse. 

IX.  COMMUNITY  INTEREST 

(59)  The Council, in Regulation  (EEC) No 2455/93, concluded  that it was in the Community 

interest  that  measures  be  imposed  on  imports  of  monosodium  glutamate  from  the  four 

countries  concerned.  It was found  that  the conclusion  on Community  interest  as set  out 

in  the  Regulation  subject  to  review  should  remain  unchanged  since  in  the  subsequent 

period  the  development  of  the  facts  underlying  this  conclusion  have  only  strengthened 

the case for maintaining the measures. 

21 

(60)  It  should  be  noted  that  monosodium  glutamate  production 

is  subject 

to  strict 

environmental  standards,  continuing  compliance  with  which  may  require  substantial 

investment.  The  ability  of  the  Community  industry  to  undertake  any  necessary 

investment  would  be endangered  if  its poor  financial  situation  resulting  from  injurious 

dumping  were  not  remedied  and  effective  competition  not  restored  through  the 

maintenance of anti-dumping measures, amended to reflect the latest findings. 

(61)  One interested  party  argued  that  to maintain  the anti-dumping  measures  at their  current 

level  would  allow  the  Community  industry  to  reinforce  its  strong  position  on  the 

Community  market  to the detriment  of users of monosodium  glutamate. In this  respect, 

it  should  be noted  that, notwithstanding  the significant  share of  the  Community  market 

held  by  the  Community  industry,  there  is  sufficient  competition  in  that  market  as 

demonstrated  by  the  presence  of  imports  from  seven  other  countries  during  the 
investigation  period,  equal  in  volume  to those  from  the  countries  concerned.  As  far  as 

the  impact  of  anti-dumping  measures  on  the  situation  of  the  Community  users  of 

monosodium  was  concerned,  it  was  acknowledged  that  any  increase  of  the  price  of 

inputs  was  of  importance  to  them.  However,  although  the  industry  using  monosodium 

glutamate refused  to indicate the percentage of its total costs attributable to monosodium 

glutamate,  it  did  not  deny  that,  as  revealed  by  the  investigation,  the  price  of 

monosodium  glutamate  has only  a minor  effect  on the  costs  of the products  in which it 

was used. 

(62)  In the light of the above, it is considered  to be in the interest  of the Community  that the 

anti-dumping  measures remain in force,  duly  amended, in order  to give  the  Community 

industry  the  necessary  opportunity  to  continue  to  redress  its  precarious  financial 

situation. 

22 

X. AMENDMENT OF THE MEASURES IN FORCE 

1. Co-operating exporters 

(63)  The  co-operating  exporters,  on  being  informed  of  the  findings  of  the  investigation, 

offered  new minimum price undertakings in respect of exports to the Community  of the 

product concerned. However,  for  the reasons described  in recitals  (25) to (28) above, it 

was  considered  that  undertakings  were  not  an  appropriate  measure  for  removing  the 

injury  being  suffered  by  the  Community  industry.  Indeed,  the  undertakings  previously 

accepted  had  to  be  withdrawn  owing  to  violation  and  no  appropriate  guarantees  were 

given  by  the  exporters  regarding  price  levels  or  compliance  that  could  justify  the 

acceptance  of  such  undertakings.  Accordingly,  the  undertakings  offered  were,  after 

consultation, not accepted by the Commission. 

(64)  For the purpose of establishing the level of the duty to be imposed, account was taken of 

the  dumping  margins  found  and  of  the  amount  of  duty  necessary  to  eliminate  the 

remaining injury  sustained by the Community  industry. 

Since  the  remaining  injury  consisted  mainly  of  price  depression  and  continuing 

abnormal  low  profitability,  the removal  of  such injury  required  that  the  industry  be put 

in  a  position  in  which  its  prices  could  be  increased  to  a  profitable  level.  In  order  to 

achieve  this,  export  prices  should  be  increased  accordingly.  For  calculating  the 

necessary  price increase, it was considered  that prices  of  the dumped  imports had to be 

compared with the cost of production  of the Community  industry plus a margin of  profit 

sufficient  to ensure the viability of that industry. 

On  this  basis, the  weighted  average  export  prices  were  compared,  for  the  investigation 

level  increased  by  customs  duties,  where 
period,  on  a  free-at-Community-frontier 
appropriate,  with  the  cost  of  production  of  the  Community  producer  concerned,  plus a 
margin  of  profit.  This  profit  level  used,  which  cannot  be  stated  for  reasons  of 
confidentiality  and which did  not reach the  level of  profits  made by that producer  prior 
to the impact of the imports concerned,  is considered  to be obtainable  in the absence of 
dumped imports and is in line with that considered reasonable by the Commission  in the 
original  investigation. 

23 

These  comparisons  showed  injury  margins  which,  expressed  on  a  weighted  average 
basis  as  a  percentage  of  the  free-at-Community-frontier  price,  ranged  from  25.4%  to 
35.7%. 

(65)  For one exporter, the margin of dumping found  was below the corresponding  increase in 

export  prices  necessary  to  remove  the  injury  as  calculated  above.  The  duty  to  be 

imposed  for  this  company  should,  therefore,  correspond  to  the  dumping  margin 

established. For the other co-operating exporters, as the margins of dumping found  were 

above  the  corresponding  increases  in  export  prices  necessary  to  remove  the  injury,  as 

calculated  above,  the  duties  to  be  imposed  for  these  companies  should,  therefore, 

correspond to the injury  margins established. 

(66)  Given the potential  for  absorption  of the effect  of an ad valorem anti-dumping  duty and 

given  the violation  of the undertakings,  as established,  a duty  should be imposed  in  the 

form  of a specific  duty, i.e. a fixed  amount of ECUs per kilo. 

2. Other producers in the exporting countries concerned 

(67)  The co-operating  exporters  accounted  for  a very  high  proportion  of  total  exports  of  the 

product  concerned  to the Community.  In establishing  the  level  of  duty  for  producers  in 

the  countries  concerned  which  neither  replied  to  the  Commission's  questionnaire  nor 

otherwise made themselves known, it was, therefore, considered  appropriate to establish 

the level of duty  applicable to such producers at the highest  amount of duty found  for an 

exporter in each country. 

(68)  3. Conclusion 

The  Regulation  subject  to  review  should  therefore  be  amended  in  accordance  with  the 

above  findings. 

XII.  COLLECTION  OF THE PROVISIONAL DUTY 

(69)  In view of the dumping margins established,  the violation of the undertakings  and of the 
seriousness  of  the  injury  caused  to  the  Community  industry,  it  is considered  necessaiy 
that  the  amounts  secured  by  way  of  the  provisional  anti-dumping  duty  be  definitively 
collected,  with  the  exception  of  those  collected  for  imports  from  Thailand  for  the 
reasons set out in recital 57, 

24 

HAS ADOPTED THIS REGULATION: 

Article I 

Article  1  of Council Regulation (EEC) No 2455/93 is hereby replaced by the  following: 

"Article I 

'1.  Definitive  anti-dumping  duties are hereby imposed on imports of monosodium  glutamate, 

falling  within  CN  code  2922  42  10,  originating  in  Indonesia,  the  Republic  of  Korea  and 

Taiwan. 

2.  The rates of duty  applicable  to the net free-at-Community-frontier  price, before  duty, shall 

be as follows: 

Country 
Indonesia 

Products manufactured  by 
All companies 

Amount of duty 
(ECU per kilogram) 
0.334 

Taric 
additional code 

Republic of Korea  Cheil Food & Chemicals Ltd 

0.129 

All other companies 

Taiwan 

All companies 

0.286 

0.289 

88 43 

88 76 

3.  Unless otherwise specified,  the provisions in force concerning customs duties shall apply.' 

Article 2 

The  amounts  secured  by  way  of  provisional  anti-dumping  duties  pursuant  to  Commission 
Regulation  (EC)  No  1754/95  shall  be  definitively  collected  in  full.  The  amount  secured  by 
way of provisional duty on imports from  Thailand shall be released. 

25 

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, 

1995 

For the Council 

26 

ISSN 0254-1475 

COM(96) 1  final 

DOCUMENTS 

EN 

02  11 

Catalogue number  :  CB-CO-96-Q01-EN-C 

ISBN 92-77-99420-7 

OfiSce for Official  Publications of the European Communities 

L-2985 Luxembourg 

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