Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) N° 3433/91 in respect of imports originating in Thailand and imposing definitive anti- dumping duties on imports of gas-fuelled, non-refillable pocket flint lighters originating in Thailand, the Philippines and Mexico
Date: 1997-02-21
Institutions: European Commission
Subjects: anti-dumping duty, dumping, non-durable goods, third country, tobacco industry

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  21.02.1997 
COM(97) 62 final 

Proposal  for  a 

COUNCIL  REGULATION  fEC) 

amending Regulation  (EEC) N° 3433/91 in respect of imports  originating 
in Thailand  and imposing definitive  anti-dumping  duties on imports 
of gas-fuelled, non-refillable  pocket flint lighters originating in Thailand, 

the Philippines and Mexico 

(presented  by  the  Commission) 

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 Thailand. 

(2) 

In  March  1995,  following  receipt  of  a  request  for  a  review  containing  sufficient 

evidence  that  the  measure  in  force  in  respect  of  the  above  Thai  imports  was  no 

longer  sufficient  to  counteract  the  injurious  dumping,  the  Commission  initiated  a 
review2 of Council Regulation (EEC) N° 3433/91. 

(3)  Simultaneously,  in  March  1995,  as  a  result  of  complaints  containing  sufficient 
evidence  of  dumping  and  material  injury  resulting  therefrom,  the  Commission 
initiated  an  anti-dumping  proceeding3  concerning  imports  of  the  same  products 
originating in the Philippines and Mexico. 

(4)  Since it was considered  appropriate to cumulatively  assess the effects  of the imports 

from  the  three  countries  concerned,  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  these  cases,  provided  all 

interested  parties  with  details  of  its  calculation  and  gave  them  sufficient  time  to 

comment  and correct material errors. 

1  OJNoL 326, 28.11.1991, p. 1 
2  OJNoC67,  18.3.1995, p. 4. 
3  OJNoC67,  18.3.1995, p. 3. 

lb 

(5)  The  review  investigation  showed  that  the  dumping  margin  for  Thai  exports  had 

increased  significantly.  Expressed  as a percentage  of the CIF Community  frontier 

value of the imports, the dumping margin for the sole Thai exporter having exported 

during the period of investigation was found to be 51.9%.  As far as Filipino exports 

are  concerned,  dumping  margins  ranging from 36.7% to  52.6% were  established, 

while the dumping margin for the sole Mexican exporter was found to be 27.1%. 

(6)  The investigation  also  showed  that the  injury  suffered  by the  Community  industry 
was material  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 

countries concerned (set out in recitals 60 to 71* of the attached proposal), led to the 

conclusion  that  although  other  elements  may  have  had  a  negative  impact  on  the 

Community  industry,  dumped  imports from Thailand,  the  Philippines  and  Mexico 

,  have by themselves caused material injury to the Community industry. 

(7)  As explained in recitals 75 to 78 of the attached proposal, the adoption of measures 
in this context is considered to be in the interest of the Community.  Since one Thai 
producer,  the  sole  Mexican  producer  and  two  Filipino  producers  offered 
undertakings  concerning  their exports  of the product  concerned  to the  Community 
which  were  found  to  be  acceptable  and,  given  the  high  level  of  co-operation 
obtained  in all three  cases, the definitive  measures  proposed  to  the  Council  should 
act as a "safety net" additional to the accepted undertakings. 

(8)  The proposed measures should therefore take the following form: 

- As far as Thailand is concerned, the measures in force  should be repealed but the 

5.8% duty rate currently applicable to imports from the company Politop should, as 

explained at recitals 83 to 86 of the attached proposal,  be retained  as the individual 

duty rate for that company in the future.  A residual duty should be imposed  at the 

level  established  for  the  co-operating  company  with  the  highest  dumping  margin, 

namely 51.9% (based  on the company's dumping margin as this was  lower than its 

injury margin); 

-  As far as the Philippines  are concerned,  an individual  duty  should  be imposed in 

respect  of  imports  from  Swedish  Match  Philippines  (which  did  not  offer  any 

undertaking )  at the level  of its injury margin, namely  17%, which was found  to be 

lower  than  its  dumping  margin.  A  residual  duty  should  be  imposed  at  the  level 

established for the co-operating  company with the highest  dumping margin, namely 
43.0% (based  on the  company's  injury margin  as  this was  lower  than  its  dumping 

margin); 

-  As far  as Mexico  is  concerned,  the residual  duty  should  be  imposed  at  the  level 

established  for  the  sole  co-operating  company  whose  undertaking  was  accepted, 

namely 27.1% (based  on the  company's dumping  margin as this was  lower than its 

injury margin). 

Council Regulation  (EC) N° 

of... 

amending Regulation  (EEC) N° 3433/91 in respect of imports  originating 

in Thailand  and imposing definitive  anti-dumping  duties on  imports 

of gas-fuelled,  non-refillable  pocket flint lighters originating in Thailand, 

the Philippines and Mexico 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European  Community, 

Having regard to Council Regulation (EC) N° 3 84/96, of 22 December  1995 on  protection 
against dumped imports from countries not members of the European  Community1,  and in 
particular Articles 9,  11 and 23 thereof, 

Having regard to the proposal  submitted by the Commission  after  consulting the Advisory 

Committee, 

WHEREAS: 

A.  PROCEDURE 

1.  Measures in  force 

(1)  By Regulation  (EEC) N°  3433/912,  the  Council  imposed  a  definitive  anti-dumping 
duty  on  imports  of  gas-fuelled,  non-refillable  pocket  flint  lighters  (hereinafter 

referred  to  as  "disposable  flint  lighters")  originating,  inter  alia,  in  Thailand.  The 

rate  applicable  to  products  originating  in  that  country  was  set  at  14.1%,  with  the 

exception  of the company Politop  Co., Ltd.  ("Politop"),  whose  duty  rate was  5.8% 

and  the  company  Thai Merry  Co., Ltd.  ("Thai  Merry"),  which  was  exempted  from 
the  duty  since  it  had  offered  an  undertaking,  accepted  by  Commission  Decision 
No  91/604/EEC3. 

1  OJ  No  L  56,  06.03.1996,  p.  1.  Regulation  as  amended  by  Regulation  (EC)  No  2331/96  (OJ 

No L 317, 6.12.1996, p. 1). 
2  OJNoL 326, 28.11.1991, p. 1. 

?  OJNoL326, 28.11.1991, p.  31. 

(2)  Further  to  the  withdrawal  of  its  undertaking  by  Thai  Merry  and  the  subsequent 
imposition of a provisional anti-dumping duty on its exports to the Community, the 
Council, by Regulation (EC) N° 398/944, amended Regulation (EEC) N° 3433/91 in 
order  to  remove the exemption from the duty  originally  granted  to  this company. 
Thai  Merry's  exports  to  the  Community  have  since  then  been  subject  to  the 
definitive anti-dumping duty at the rate of 14.1%. 

2.  Request for a review 

(3)  On  18  March  1995,  the  Commission  announced,  by  a  notice  published  in  the 
Official  Journal  of  the  European Communities5  the  initiation  of  a  review  of 
Regulation  (EEC)  N° 3433/91  in  respect  of  imports  of  disposable  flint  lighters 
originating  in  Thailand  and  commenced  an  investigation  under  Article  11 (3)  of 
Regulation  (EC)  No  3283/946  which  was  replaced  during  the  investigation  by 
Regulation  (EC)  No  384/96,  hereinafter  referred  to  as  "the  Basic  Anti-dumping 
Regulation".  This  interim  review was  initiated  as  a result  of  a request  lodged  in 
March  1994  by  the  European  Federation  of Lighter  Manufacturers  (EFLM),  on 
behalf of its members representing  almost the totality of Community production of 
the like product (namely the BIC Group, producer in France, Greece and Spain, the 
Swedish Match Group, producer in France and the Netherlands, Tokai Seiki GmbH, 
manufacturer  in Germany  and Flamagas,  producer  in Spain).  This request, which 
alleged that the measure in force in respect of Thai imports was no longer  sufficient 
.  to  counteract  the  injurious  dumping,  contained  sufficient  evidence  to  justify  the 

initiation of a review. 

4  OJ No L 54, 25.02.1994, p. 1. 
5  OJNoC67,  18.3.1995, p. 4. 
6  OJ No L 349, 31.12.1994,  p i. 

(4J  Since the interim review in respect of imports originating in Thailand was likely not 

to be concluded before the end of the five year period of application of the measures 

concerned  (i.e.  on  30  November  1996),  the  interim  review  has  also  covered,  in 

accordance  with  the  provisions  of  Article  11 (7)  of  the  Basic  Anti-dumping 

Regulation,  the circumstances  set  out in Article  11 (2)  of  the  said Regulation  (i.e. 

the circumstances due to be examined in the context of an expiry review). 

3.  Complaints 

(5)  On  18  March  1995,  the  Commission  announced,  by  a  notice  published  in  the 
Official Journal  of  the European Communities1  the  initiation  of  an  anti-dumping 
proceeding  concerning  imports  of  disposable  flint  lighters  originating  in  the 
Philippines and Mexico and commenced an investigation pursuant to Article 5 of the 
Basic  Anti-dumping  Regulation.  This proceeding  was  initiated  as  a result  of  two 
'complaints lodged  in August  1994 in respect  of imports of disposable  flint  lighters 
originating respectively in the Philippines and in Mexico. 

The complaint  concerning  imports originating in the Philippines was lodged  by the 

BIC  Group, the  Swedish Match Group and Tokai  Seiki  GmbH, representing more 

than 90% of total  Community  production  of the like  product.  Immediately  before 

initiation, the Spanish producer Flamagas became party to the complaint. 

The  complaint  concerning  imports  originating  in Mexico  was  lodged  by  the  BIC 
Group  and  the  Swedish  Match  Group  only.  The  complaint  remained  however 
admissible  since the complaining producers represented  a major proportion  of total 
Community  production  of  the  like  product. 
Immediately  before  initiation,  the 
Spanish producer Flamagas also became party to this complaint. 

OJNoC67,  18.3.1995, p.  3. 

It  was  considered  that  the  relevant  complaints  contained  sufficient  evidence  of 

dumping  by  the  Filipino  and  Mexican  imports  and  of  material  injury  resulting 

therefrom  to  justify  the  initiation  of  anti-dumping  proceedings.  It  was  however 

considered  appropriate  that  the  relevant  investigations  be  carried  out  in  the 

framework  of a single proceeding, given that both complaints,  lodged  almost at the 

same time, contained similar allegations concerning imports of the same product. 

4.  Initiation of investigations 

(6)  The  Commission  officially  advised  the  exporters  and  importers  known  to  be 

concerned,  the  representatives  of  the  exporting  countries  and  the  complainant 

Community producers about the initiation of the review and the initiation of the new 

proceeding.  Interested  parties  were  given  the  opportunity  to  make  their  views 
known in writing and to request a hearing. 

(7)  A number of importers and producers in the countries  concerned  made their views 

known in writing.  All parties who so requested were granted hearings. 

(8)  The investigation of dumping in respect of the three exporting  countries  concerned 

covered  the period  1 April  1994  to  31  December  1994  (hereinafter  referred  to  as 

"the investigation period").  For the purpose of the dumping, injury and Community 

interest  determinations,  the  geographical  scope  of  the  investigation  was  the 

Community  as  composed  at  the  time  of  initiation,  therefore  including  all fifteen 

Member States. 

(9)  The  Commission  sent  questionnaires  to  all  parties  known  to  be  concerned  and 
received  detailed  replies  from  the  complainant  Community  producers,  from  two 
producers in Thailand, one producer in Mexico and its related exporter in the United 
States as well  as from another related  company which was  selling  the like product 
on  the  Mexican  market,  from  three  producers  in  the  Philippines  and  a  related 
company  in  Japan,  and  from  four  importers  in  the  Community  related  to  the 
producers in the exporting countries concerned and one independent importer in the 
Community. 

(10)  The Commission sought and verified  all the information  it considered  necessary for 

a determination of dumping and injury and carried out investigations at the premises 

of the following  firms: 

(a) complainant  Community producers: 

Producing  companies: 

-  BIC S.A., Redon, France 

-  Feudor S.A.  (Swedish Match), Rillieux-la-Pape, Prance 

Producing  companies and sales  offices: 

-  Flamagas S.A., Barcelona, Spain 
-  LaforestBIC S.A.,  Tarragona, Spain 
-  ViolexBIC S.A.,  Athens, Greece 

Sales  companies: 

-  BIC Deutschland GmbH, Ettlingen, Germany 

-  BIC S.A.,  Clichy, France 

-  Biro BIC Limited, London, United Kingdom 

-  Cricket S.A.(Swedish Match), Rillieux-la-Pape, France 

-  Ebas Nederland (Poppell B. V. - Swedish Match), Eindhoven, Netherlands 

(b) producers/exporters: 

From Thailand: 

-  Politop Co., Ltd. Bangkok, Thailand 

-  Thai Merry Co., Ltd. Samutsakorn, Thailand 

From the Philippines: 

From Mexico: 

-  Iwax  Philippine,  Inc.,  Rosario,  Cavité,  Philippines  (the 

investigation  having  also  covered  the  related  company 

Iwahori Philippines, Inc., Mariveles, Bataan, Philippines) 

- Iwax Inc.,  Shizuoka, Japan (in respect  of exports from its 
subsidiaries  Iwax  Philippine,  Inc.  and  Iwahori  Philippines, 
Inc.) 

- Swedish Match Philippines, Inc., Manila, Philippines 

- JMP Mexico,  S.A.  de C.V.,  Tijuana, Mexico (in respect  of 

its production of disposable flint lighters in Mexico) 

-  Tokai  de Mexico,  S.A.  de  C.V.,  Cuernavaca,  Mexico  (in 
respect  of  its  domestic  sales  of  disposable flint lighters  in 
Mexico) 

-  Scripto  Tokai  Corp.,  Fontana,  USA  (in  respect  of  its 

exports  to  the  Community  of  disposable  flint  lighters 

manufactured by JMP in Mexico) 

(c) importers related  to producers/exporters: 

-  Iwax (U.K.) Ltd8, Ballymoney, United Kingdom 
-  Poppell B.V.  (Swedish Match), Eindhoven, Netherlands 

-  Tokai Seiki GmbH, Mônchengladbach, Germany 

-  Tokai Seiki B.V., Hoofddorp, Netherlands 

8  This importer became independent after the period of investigation. 

(d) independent importers: 

-  Pollyflame International B.V., Roelofarendsveen, Netherlands 

5.  Subsequent procedure 

(11)  It has to be noted that a number of considerations (detailed below at recitals 40 to 
44) have led the Commission to the conclusion that a cumulative assessment of the 
effect  of the dumped imports from both the country subject to  a review (Thailand) 
and the two  countries  subject  to  a new  proceeding  (the Philippines  and Mexico), 
was warranted. 

As  a  result,  from  a  procedural  point  of  view/  it  was  considered  that  definitive 
measures,  if  any,  should  be  directly  adopted  in  respect  of  all  three  countries 
concerned,  without  resorting  to  the  intermediate  step  of  provisional  duties  (an 
approach which also implied that the measures in force  in respect  of Thai imports 
would have to be simultaneously repealed). 

(12)  The Commission accordingly continued to seek and verify  all information it deemed 

necessary for its definitive  findings. 

(13)  Parties were informed  of the essential facts and considerations on the basis of which 
it  was  intended  to  recommend  the  imposition  of  definitive  anti-dumping  duties. 
They were also granted a period within which to make representations (and/or  offer 
undertakings) subsequent to the disclosure. 

(14)  The  parties  either  did  not  submit  any written  comments  or  submitted  comments 
which  did  not  justify  any  alteration  of  the  preliminary  conclusions.  Within  the 
specified time limit, three producers/exporters offered  undertakings. 

(15)  The  establishment  of findings which,  without  resorting  to  the  intermediate  step  of 
provisional  duties,  could  be  considered  as  final,  made  it  necessary  to  provide  all 
parties involved with preliminary and final disclosure  and  grant  them  sufficient  time 
to  submit  their  views.  This,  together  with  the  setting  up  of  appropriate 
undertakings,  proved  to  be  time-consuming  and  accordingly,  the  investigation 
overran the normal  duration  provided  for  in Articles  6 (9)  and  11 (5)  of the  Basic 
Anti-dumping Regulation. 

B.  PRODUCT  UNDER  CONSIDERATION  AND 
LIKE PRODUCT 

1.  Product under consideration 

(16)  The  product  subject  to  the  definitive  anti-dumping  duty  referred  to  at  recital  1 as 
well  as  the  product  subject  to  the  proceeding  initiated  in  respect  of  imports 
originating  in the  Philippines  and  Mexico  is  gas-fuelled,  non-refillable  pocket  flint 
lighters.  This product falls within CN code ex 9613  10 00. 

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 
those  of the  above  mentioned  product.  They  were  therefore  not  considered  to  be 
identical to the product  concerned  in the original  investigation  concerning  Thailand, 
were not  covered by the original investigation  and were excluded  from  the  scope of 
the  measures.  No  reasons  have  emerged  in  the  course  of  the  current  review  and 
new  proceeding  which would justify  a departure  from  this  approach.  Accordingly, 
piezo lighters were kept outside the scope of the current  investigations. 

In  their  representations  made  further  to  the final disclosure,  the  Thai  authorities 

have argued that there are two distinct segments in the Community's disposable flint 

lighter  market,  the  high  end  served  by  high  quality  Community  produced  lighters 

and  the  low  end  served  by  imports,  including  those  from  Thailand.  This  view, 

expressed in previous cases concerning disposable flint lighters, cannot be shared for 

the reasons already given in the past, which can be summarised as follows: 

For  the  market  of  a  product  to  be  divided  into  segments  requires  at  least  that 
differences  in physical  characteristics  be  perceptible  to,  and  actually  perceived  by, 
consumers and that clearly separate channels of sale exist.  These conditions are not 
met in the case of disposable flint lighters since all such products, which are globally 
perceived  as being "non-piezo and disposable" lighters,  are sold without  distinction 
in the same kind of shops to customers having the same expectations (namely to buy 
a disposable product belonging to a single category of utility goods). 

Finally,  it  has  to  be  noted  that  although  the  product  under  consideration  is 

'manufactured  in different  sizes  and  models,  all these  disposable flint lighters  have 

the same basic technical  characteristics,  the same basic application and perform the 

same  function.  Accordingly,  as  in  previous  investigations,  the  whole  range  of 

models of disposable flint lighters was considered  as forming one single category  of 

product. 

10 

2.  Like product 

(17)  As regards the disposable flint lighters produced  and sold  domestically  in the three 
countries  concerned  where  such  sales  had  taken  place  and  information  in  their 
respect had been made available, the investigation  showed that such products were 
either  alike  in  all  respects  to,  or  closely  resembling,  those  exported  to  the 
Community from the countries in question. 

(18)  The investigation  also established that the disposable flint lighters produced  by the 
Community  industry  and  sold  in the  Community  market  and  those  imported from 
the  three  countries  concerned  possess  similar  basic  physical  and  technical 
characteristics and are intended for the same use.  While there may be some minor 
differences  between  the  product  imported  from  the  countries  concerned  and  the 
Community  production,  these  differences  (for  instance  in  the  presentation  or  the 
technique  used  for  the  assembly  of  the  lighter)  do  not  affect  the  substantial 
characteristics and properties of the product.  The disposable flint lighters produced 
and  sold  by the  Community  industry  and those  imported  from  the  three  countries 
concerned should therefore be regarded as like products. 

(19)  Accordingly,  it is  concluded  that  disposable flint lighters produced  and  sold  in the 

Community,  as  well  as  those  produced  and  sold  in  Thailand,  the  Philippines  and 

Mexico  and those exported to the Community from these three countries  should be 

regarded  as  "like products", within the meaning  of Article  1 (4)  of the Basic Anti 

dumping Regulation. 

11 

C.  DUMPING 

1.  Normal value 

(a)  Thailand 

(20)  One Thai co-operating  exporter,  whose  exports  represented  almost  100% of total 
Community  imports  from  Thailand  during  the  investigation  period,  had  sold 
disposable  flint  lighters  on  its  domestic  market.  For  2  models,  normal  value  was 
based  on  domestic  selling  prices,  since  after  exclusion,  in  accordance  with  the 
provisions of Article 2 (4)  of the Basic Anti-dumping Regulation,  of non profitable 
sales, the remaining profitable  sales of comparable models were found  to  represent 
at least 5% of the sales volume of the models concerned to the Community.  For a 
third  model,  in  the  absence  of  sufficient  profitable  sales  of  a  comparable  model, 
normal value was constructed  on the basis of the  company's  costs  of  manufacture, 
selling, general and administrative expenses (hereinafter referred to as "SG&A") and 
profit.  These  SG&A  and  profit  were  established  on  the  basis  of  the  above 
mentioned profitable sales. 

(21)  For the  other Thai  exporter no  dumping  calculation could  be made due to the fact 

that the company had ceased to export in 1992. 

(b)  Mexico 

(22)  The  sole Mexican  co-operating  exporter,  whose  exports  represented  almost  100% 

of total Community imports from Mexico  during the investigation period, was fully 

export oriented but was nevertheless able to provide information  regarding sales  of 

the like product on its domestic market, as another company in the same group was 

producing and selling disposable flint lighters on the Mexican market.  However, the 

sales in question, which were the only domestic sales of the like product available in 

Mexico,  proved  to  be  partly  made  at  a  loss,  the  remaining  profitable  sales 

representing less than 5% of the quantities exported to the Community. 

12 

(23)  Accordingly,  the Commission constructed normal value for this exporter by adding 

to the cost of manufacture of each exported model, the domestic SG&A available in 

Mexico, i.e.  those of its related company selling disposable flint lighters in Mexico. 

As  regards  profit,  given  the  lack  of  representative  profitable  sales  in  Mexico  for 

disposable flint lighters and the non-availability of reliable data in respect of sales of 

the  same  general  category  of  products  in  this  country,  a  reasonable  alternative 

solution had to be sought. 

(24)  To this end, it was examined whether Thailand, for which representative and reliable 
data were available,  could be considered  as a comparable market to Mexico  in the 
sector  concerned  and,  thus,  an appropriate  reference  for  the  profit  determination. 
This  examination  led  to  the  conclusion  that  the  conditions  prevailing  on  both 
markets  were  similar.  Moreover,  the  exporter  concerned  acknowledged  that  the 
profit margin achieved in Thailand was not exceeding  the one normally realised on 
the  Mexican  market  in  the  same  business  sector.  Therefore,  for  the  purpose  of 
constructing  normal  value  for  each  model  exported  by  the  Mexican  co-operating 
exporter,  the  profit  margin  established  in  Thailand  was,  in  accordance  with  the 
provisions  of Article 2 (6) (c)  of the Basic  Anti-dumping  Regulation,  added to  the 
above mentioned Mexican cost of manufacture and domestic SG&A. 

(c)  Philippines 

(25)  The comparison  of import statistics,  after  exclusion,  on the basis  of  available data, 

of certain lighters which are outside the scope of the investigation (see above, recital 

16,  considerations  concerning  piezo  lighters)  with  quantities  reported  by the three 

Filipino co-operating exporters for the period of investigation,  showed a level of co 

operation close to 100%. 

13 

(26)  In the Philippines,  two  co-operating  exporters  (belonging to the  same group) were 

fully  export  oriented.  The third co-operating  exporter was  selling  on  its  domestic 

market through  a related  selling  company  during  the  investigation  period,  but  the 

latter,  recently  become  independent,  refused  to  co-operate.  Therefore,  no 

information regarding  sales of the like product  (or of the  same general  category  of 

products)  on  the  Filipino  market  could  be  collected  and  normal  value  had  to  be 

constructed on the" basis of data available. 

(27)  To this end, it was examined whether Thailand, for which representative and reliable 
data were available,  could be considered  as a comparable market to the Philippines 
in the sector concerned and, thus, an appropriate reference for the SG&A and profit 
determination.  This examination led to the conclusion that the conditions prevailing 
on  both  markets  were  similar.  Moreover,  the  exporters  concerned  admitted  that 
both  the  SG&A  incurred  and  the  profit  margin  achieved  in  Thailand  were  not 
exceeding  those  normally  encountered  on the Filipino  market  in the  same business 
sector.  Therefore,  for the  purpose of constructing  normal value in the  case  of the 
three Filipino co-operating exporters, the Commission added to their respective cost 
of  manufacture  for  each  exported  model,  in  accordance  with  the  provisions  of 
Article  2 (6) (c)  of the Basic  Anti-dumping F.egulation,  an amount  for  SG&A and 
for profit based on the respective amounts established in Thailand. 

2.  Export price 

(28)  Practically  all  export  transactions  made  by  the  exporters  concerned  during  the 

investigation  period  were  considered  (only  a  few  models  sold  in  very  small 

quantities were disregarded  in agreement with the representatives  of the companies 

concerned). 

14 

(29)  Where export  sales were  made directly  to unrelated  importers,  export  prices  were 

established  on the basis of the prices  actually paid  or payable for the product  sold 

for export to the Community. 

(30)  Where  exports  were  made  to  related  companies  which  imported  the  product 

concerned  into  the  Community,  export  prices  were  constructed  on  the  basis  of 

resale  prices  to  the first independent  buyer,  adjusted  to  take  account  of  all  costs 

incurred between importation and resale including  customs  duties and a reasonable 

profit  margin  (namely  5%).  The latter  was  established  on the  basis  of  the  profit 

margins considered reasonable in thii; business sector for unrelated importers. 

Where cost  allocations  for importers' SG&A were necessary  in the construction  of 
export prices, these were generally made on the basis of turnover with the exception 
of those  cases  where  the  importers  provided  sufficient  evidence  to justify  another 
method  of allocation.  These  allocations included  all the general  administration and 
selling  costs  related  to  the  sales  under  consideration,  whether  financed  by  the 
exporter or by the related importer.  Discounts and rebates given in connection with 
sales  of  the  related  importer  to  independent  buyers  were  taken  into  account  in 
constructing export prices. 

3.  Comparison 

(31)  The weighted  average normal value by model,  as determined  above, was compared 

at an ex-factory level with the export price, on a weighted  average basis in the case 

of Thailand  and on a transaction-by-transaction  basis in the  case  of the Philippines 

and Mexico.  Indeed, in the latter cases,  the export  price had to  be constructed  on 

the basis of resale prices to the first independent buyer.  These resale prices and the 

corresponding  constructed  export  prices  showed  patterns  of  pricing  differing 

significantly  among different purchasers, regions oi  time periods, which would have 

resulted  in  that  the  full  degree  of  dumping  being  practised  would  not  have  been 

reflected had the method based on weighted-average export prices been used. 

15 

(32)  As far as differences  affecting  price comparability  are concerned,  adjustments were 

granted  in  accordance  with  Article  2  (10)  of the Basic  Anti-dumping  Regulation, 

where  satisfactory  evidence  was  therefor  supplied.  Such  adjustments  concerned 

differences  in costs  for level  of trade (calculated  on the  basis  of  advertising  costs, 

incurred on the domestic market but not on exports), transport, insurance, handling, 

packing and credit. 

4.  Dumping margins 

(33)  The  examination  of  the  facts  showed  the  existence  of  dumping  for  all  the  co 

operating  exporters  for  which  calculations  could  be  made,  the  dumping  margins 

being equal to the difference between normal value and export price duly adjusted. 

(34)  The  weighted  average  dumping  margins  expressed  as  a  percentage  of  the  free  at 

t 

Community frontier price are as set out below: 

Thailand: 

Thai Merry: 

51.9% 

Mexico: 

production by JMP Mexico 
and exports by Scripto Tokai Corp. USA:  27.1% 

Philippines:  - production by Iwax Philippine Inc., and 
Iwahori Philippines Inc. and exports by 
Iwax Inc. Japan (single dumping margin):  52.6% 

- Swedish Match Philippines, Inc. 

36.7% 

16 

D.  COMMUNITY  INDUSTRY 

(35)  The  investigation  confirmed  that  the  complainant  Community  producers,  either 
represented  by the EFLM  (on whose behalf the  request  for  an  interim  review in 
respect of Thai imports had been lodged) or acting separately in two distinct groups 
(one having lodged the complaint concerning imports originating in the Philippines 
and  the  other  one  the  complaint  concerning  imports  originating  in  Mexico), 
accounted in all cases for a major proportion of total Community production of the 
like product. 

(36)  During  the  course  of  the  investigation  carried  out  in  respect  of  the  above 
companies, it became apparent that two producers or groups of producers, namely 
Tokai Seiki GmbH, together with one of its sales subsidiary in the Community, and 
the companies belonging to the Swedish Match Group, were related respectively to 
the  sole Mexican  exporter  and  one Filipino  exporter  and  were  also  importing  the 
dumped product from the countries concerned. 

In  these  circumstances,  the  Commission  examined  whether,  in  the  light  of  the 
provisions  of  Article  4 (1) (a)  of  the  Basic  Anti-dumping  Regulation,  these 
companies  should be excluded from "the Community industry".  In this respect,  it 
should be recalled that Article 4 (1) (a) does not provide for the automatic exclusion 
of producers who are related to exporters and/or themselves importing the dumped 
products,  but  rather  obliges  the  Commission  to  examine  on  a  case  by  case basis 
whether the exclusion of any producer in this situation is warranted. 

17 

(37)  As  far  as  Tokai  Seiki  GmbH  is  concerned,  it  has  firstly  to  be  noted  that  this 

company had made it clear that it only supported the action against  the Philippines 

and  Thailand  and  that  its  co-operation  as  a  potential  Community  producer  was 

restricted  to  the  investigations  in  respect  of  these  two  countries.  Secondly,  the 

investigation  showed  that this producer was  not  only  related  to  the  sole  Mexican 

exporter but also responsible for a very large proportion of the total imports into the 

Community of disposable flint lighters declared as originating in Mexico. 

In this respect, it should be recalled that the investigations  concerning Mexican and 
Filipino  imports  were  carried  out  in  the framework of  a  single  proceeding  (see 
recital 5) and that a cumulative assessment of the effect  of the dumped imports  from 
Thailand, the Philippines and Mexico was found to be warranted (see recitals 40 to 
44).  In  this  context,  it  was  considered  that  taking  into  account  the  situation  of 
Toka> Seiki GmbH in the overall injury assessment was not appropriate since, given 
the  importance  of the Mexican  imports concerned,  it would  have  led  to  unreliable 
results.  Accordingly,  it was  considered  appropriate to  exclude  Tokai  Seiki GmbH 

* from "the Community industry". 

(38)  As regards the companies belonging to the Swedish Match Group, which are related 

to the Filipino exporter Swedish Match Philippines, Inc., it appeared appropriate to 

determine whether those companies (which were complainants in all three cases and 

fully  co-operated  in  all  three  investigations)  were  primarily  producers  with  an 

additional  activity  based  on  imports  and  merely  supplementing  their  Community 

production,  or  whether  they  were  importers  with  relatively  limited  additional 

production in the Community. 

18 

The investigation revealed that the import activity of the companies belonging to the 
Swedish  Match  Group  in  respect  of  the  product  concerned  originating  in  the 
Philippines was extremely limited, thus underlining that the core of their operations 
relating to the product concerned firmly remained in the Community.  Accordingly, 
it  was  considered  appropriate  to  maintain  the  companies  concerned  within  "the 
Community industry". 

(39)  The injury findings set out below  are therefore  based on the information  submitted 
by the co-operating companies other than Tokai Seiki GmbH, namely the producers 
belonging  to  the  BIC  Group  and  to  the  Swedish  Match  Group,  and  the  Spanish 
company Flamagas. 

E.  INJURY 

1.  Cumulation 

(40)  The Basic Anti-dumping Regulation requires,  as a precondition  of cumulation, that 

the countries concerned be subject to simultaneous investigations, that the margin of 

dumping  established  in relation to  the imports from each  country  be  more than de 

minimis (i.e.  more than 2%)  and that the volume  of imports from each country be 

not negligible.  Where such conditions are met, the conditions of competition should 

• then be examined, in particular to determine whether imported products originating 

in the countries concerned are interchangeable,  are sold at similar price levels, have 

common  or  similar  channels  of  distribution  and  are  simultaneously  present  in the 

same geographical markets. 

19 

(41)  In this respect, it has to be noted that the disposable flint lighters exported from all 

three  countries  concerned  are  subject  to  simultaneous  investigations  which  have 

established  dumping  margins ranging from 27.1% to  52.6%.  In addition,  none  of 

the  exporting  countries  concerned  delivered  to  the  Community  quantities 

representing a market share beneath  1%, which could then have been considered as 

negligible. 

As regards their conditions of competition, the imported products originating in the 

three countries concerned were found to be interchangeable and sold at similar price 

levels,  to  have  similar channels  of distribution  and to  be  simultaneously  present in 

the same geographical markets. 

.  In this context, the following arguments were raised by interested parties: 

(42)  The two related Filipino producers questioned the appropriateness of cumulation in 
the case of Filipino and Mexican imports on the grounds that differences  in volume 
and progression of imports between these two  countries would be such as to  affect 
the  above  conclusion  that  Filipino  and  Mexican  disposable  flint  lighters  were 
competing under similar conditions on the Community market. 

In support  of this assertion, they claimed that the actual rate of increase of Filipino 
imports was not, by far, as sharp as that of Mexican imports and that the  difference 
was  such  as  to  warrant  a  separate  assessment  of  the  impact  of  the  imports 
concerned  on the Community  market.  Information  was provided  showing that the 
actual  progression  of  Filipino  imports  was  less  marked  than the  one  reported  by 
Eurostatistics.  Reference was also made to a previous case9 where the Commission 
had  decided  not  to  cumulate  imports  from  Korea  and  China  because  the 
investigation  had  shown  "diametrically opposed  progressions"10  as  regards  import 
volume  and  market  share  as  well  as  marked  differences  in  these  two  countries' 
respective pricing policies. 

9  Commission Regulation (EEC) No 763/90 of 26 March  1990 (OJ. No L 83 of 30.3.90), imposing a 
provisional anti-dumping duty on imports of tungsten carbide and fused tungsten carbide originating 
in the People's Republic of China and terminating the anti-dumping proceeding concerning imports 
of those products from the Republic of Korea. 

10  Recital 42 of Regulation (EEC) No 763/90. 

20 

However, while the progression of Filipino imports (corresponding to an increase in 

market share from 2% in  1990 to 3.3% in  1994) is less marked than that registered 

in the case of Mexican imports, of which the starting point was lower (the Mexican 

market  share,  0.1% in  1990  reached  9.2%. in  1994),  it  must  be  noted  that  both 

countries  achieved  a  significant  market  share  during  the  investigation  period  and 

exports  were  made  at  prices  significantly  undercutting  those  of  the  Community 

industry.  In addition, it is worth noting that both Filipino and Mexican imports have 

increased  in  absolute  terms  as  well  as  in  market  share  and  the  levels  of  price 

undercutting practised were very similar. 

It  was  therefore  considered  that  the  respective  positions  of  Filipino  and  Mexican 
imports on the Community market were  not  sufficiently  different  so  as to justify  a 
finding  that  the  conditions  of  competition  between  Filipino  and  Mexican  lighters 
were different.  Accordingly, the above claim could not be accepted. 

(43)  The representative of one of the Thai exporters  also claimed that the injury caused 

by  Thai  imports  should  not  be  cumulatively  assessed  with  the  one  attributable  to 

Mexican/Filipino  imports  for  the  following  reasons:  Although  Article  3 (4)  of  the 

Basic  Anti-dumping  Regulation  allows  cumulation  in  case  of  simultaneous 

investigations,  cumulation  of  Thai  imports,  which  are  the  subject  of  an  interim 

review,  with  Mexican/Filipino  imports  would  be  inappropriate  because  the  legal 

standards  (and the  consequent  legal  tests) which  apply in  such  a review  would  be 

different from those applicable to a new proceeding. 

21 

As  regards  the  appropriateness  of  a  global  assessment  of  the  impact  of  imports 
already  subject  to  measures  together  with  imports  which  are  investigated  for  the 
first time,  it  is  considered  that  since  the  Basic  Anti-dumping  Regulation  does  not 
preclude such a methodology, in particular where a full scale injury investigation has 
been carried  out,  any decision  in this respect  should  be  made  for  each  case  on  its 
own  merits,  i.e.  by  examining  the  impact  of  the  respective  behaviour  of  the 
exporting countries concerned. 

In this respect, it should be noted that the anti-dumping measures applicable to Thai 
imports  did  not  prevent  this  exporting  country,  after  the  withdrawal  by  the  main 
Thai exporter of its undertaking in  1993, to resort again to injurious dumping, with 
the  result  that  Thailand  appears to  have then  adopted  a very  similar  behaviour  to 
that of the Philippines and Mexico. 

This  similarity  of  behaviour  means  that,  notwithstanding  the  measures  in  force 
(likely to have, ipso facto,  become insufficient  to counteract the injurious dumping), 
'imports  from  the  country  being  reviewed  may  have  contributed,  on  a  par  with 
imports from the countries  subject to the new proceeding,  to  any injury which may 
prove to be attributable to the dumped imports under investigation. 

(44)  Therefore,  it was  considered  that the similarity  of behaviour  of the three  exporting 

countries  concerned  (with  the  consequent  impossibility  to  assess  separately  their 

respective  contribution  to  injury),  together  with  the  fact  that  the  above  criteria 

concerning  conditions  of  competition  are  met,  was  such  as  to  make  cumulation 

warranted. 

22 

This  approach was  criticised  by the  Thai  authorities  on the  grounds  that  it would 

lead to a confusion of the issue of whether to impose anti-dumping duties in the  first 

instance (i.e. in respect of Filipino and Mexican imports) with the separate, allegedly 

higher  standard  of  whether  existing  duties  (applicable  to  Thai  imports)  should  be 

continued  (in  an  amended  form,  in  the  context  of  an  interim  review  having  also 

covered the circumstances due to be examined in an expiry review). 

This  view  could  not  be  accepted  in 'particular  because  the  argument  of  the  Thai 
authorities  that  the  standards  of  injury  applicable  to  reviews  of  the  present  kind 
would be higher than the one applicable to new proceedings does not appear to be 
correct, notably in the light of the combined provisions of Article 3 and Article  11 of 
the  Basic  Anti-dumping  Regulation.  Indeed,  in  the  context  of  a  review  of  the 
present  kind,  the  Institutions  have  to  take  account  of  the  fact  that  the  existing 
measures  may  have  limited  the  injurious  effects  of  the  dumped  imports  under 
examination.  The latter may have either remained injurious  or become  such  as to 
support a finding that the injury is likely to recur in the absence of measures. 

On the basis  of all the above  considerations,  the appropriateness  of the  cumulative 

assessment  of the  similar  and  simultaneous  effect  of the  dumped  imports from the 

three countries concerned was therefore confirmed. 

23 

2.  Total Community  consumption 

(45)  In order to  calculate total  apparent consumption of the product in question  on the 

Community  market,  Community  producers' sales  in  the  Community  of  disposable 

flint  lighters were added to the total imports into the Community, as declared under 

CN code  9613  10 00  (excluding  however,  as far as the Philippines  are concerned, 

disposable piezo  lighters,  on  the  basis  of  reliable  data  made  available  during  the 

investigation).  On  this  basis,  the  total  apparent  consumption  of  disposable  flint 

lighters has grown between  1990 and 1994 by 21%. 

(46)  It  is  however  known  that  this  high  rate  of  increase  has  to  be  qualified.  Indeed, 
importers  (which  were  anticipating  an  increased  anti-dumping  duty  on  Chinese 
disposable flint lighters) imported large quantities from the P.R.  of China at the end 
of  1994.  Part of these quantities (around  65 million units), which could not be put 
on the market before  1995, were kept in stock and this situation artificially increased 
total apparent consumption in 1994. 

• Thus, in order to assess the actual rate of increase of Community consumption, the 
Commission  has  estimated  that  the  share  of  Chinese  imports  cleared  through 
customs  in  1994  (amounting  in  total  to  176.7  million  units)  likely  to  have  been 
resold  (by  importers to  wholesalers  or retailers)  in the  same year amounted  to  +/-
110 million units.  On this basis, the increase in total consumption is  11% (instead of 
21%).  Such  a rate  of  increase  would  appear  to  reflect  fairly  the  actual  trend  of 
Community consumption. 

24 

3.  Factors relating to the dumped imports 

(a)  Imports'increase rate 

(47)  The overall rate of increase of imports from the countries concerned was found  to 
Indeed,  between  1990  and  1994, 

be  very  significant  (more  than  +  280%). 
quantities: 

-  were multiplied  by more than  120 in the  case of Mexico  (even  though from an 
admittedly extremely low starting point); 

- increased by more than 95 % in the case of the Philippines; 

-  increased  by  18 % in the case of Thailand.  In the context  of a review,  such an 
increase  rate  remains  significant,  as  it  appears  likely  that  the  imposition  of  anti 
dumping measures in 1991 (and their amendment in 1994), has had an impact on the 
rate of increase of Thai imports, even if limited by the decrease in Thai selling prices 
following the withdrawal of its undertaking by the main Thai exporter. 

(b)  Market share 

(48)  Imports  from  the  three  countries  concerned,  considered  together,  have  captured 
between  1990  and  1994  an  additional  10%  of  the  Community  market  for  the 
product in question (their share of the market indeed increased from 4.6% to  15%). 
In  the  meantime,  in  a  growing  market,  the  Community  producers  have  lost  a 
substantial  share  of  the  market,  namely  more  than  8.5  percentage  points, from 
57.3% in  1990 to 48.6% in  1994.  This means that, globally, the position  of other 
third countries has also been slightly eroded (a more detailed  examination however 
showed, as explained at recital 70, that the P.R. of China substantially increased its 
share of the Community market to the detriment of exporting  countries other than 
those subject to the current investigations). 

25 

(c)  Prices of imports 

(49)  For the  model  comparison,  as  in all  previous  investigations  concerning  disposable 

flint lighters, it was considered appropriate that only those lighters with an equal or 

almost equal amount of gas, and therefore a similar number of ignitions, be taken as 

a basis for the calculation of undercutting. 

(50)  Where sales were made to unrelated importers, the comparison was made between 
the CIF import price, adjusted to duty paid, customer delivered level and the selling 
price in the EC of the Community producers at the same level of trade.  Where sales 
were to a related importer, the price comparison was made on the basis of the sales 
to the first independent customer. 

The  average  level  of  price  undercutting,  expressed  as  a  percentage  of  the 

Community industry's average price, was found to be more than 30% in all cases but 
one  (namely  the  Filipino  company  related  to  the  Swedish  Match  Group,  whose 

exports to the Community,  in extremely limited quantities, cannot be considered  as 

representative  of  Filipino  exports  of  disposable  flint  lighters).  This  means  that 

prices  of  the  disposable  flint  lighters  imported  from  the  countries  concerned  were 

significantly  below  the  prices  practised  by  the  Community  producers  during  the 

investigation period. 

26 

4.  Situation of Community industry 

(a)  General 

(51)  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 or» offer.  This means that faced with low priced dumped 
imports, the Community industry is either forced  to lower its prices in order to try 
to  maintain  market  share,  production  level  and  capacity  utilisation,  or  led  to  lose 
market share if it tries to maintain its prices. 

(b)  Capacity, production and sales 

(52)  Between  1990  and  the  investigation  period,  capacity  remained  stable  while 
production  very  slightly  increased.  Sales  slightly  increased  in  volume  and  very 
slightly increased in value. 

(c)  Market share 

(53)  The Community industry's market share decreased from  57.3% in 1990 to 48.6% in 

the investigation period. 

27 

(d)  Prices 

(54)  Prices,  on average,  slightly improved until  1992, then slightly decreased.  It has to 
be noted in this respect that, in an attempt to keep its market share, the Community 
industry has, over the period examined,  sold increasing  quantities of products with 
special  executions  (such  as  "sleeved"  and  "printed"  lighters,  which  would  have 
normally  justified  price  levels  higher  than  those  of  "standard"  lighters).  The 
investigation  thus  showed  that  such higher  price  levels,  which  would  normally  be 
associated  with  more  sophisticated  products,  could  not  be  maintained,  with  a 
consequent impact on the Community industry's profitability. 

(e)  Profitability 

(55)  The  Community  industry's  average return on sales  of the like  product,  negative  in 

1990,  improved  and  became  slightly  positive  in  1991.  It  deteriorated  again,  but 
In  1993,  the  average  return  was,  again,  negative. 
remained  positive,  in  1992. 
^During  the  investigation  period,  the  average  sales  price  was  slightly  above  the 
average cost of production. 

(f)  Employment 

(56)  In  an  effort  to  reduce  its  costs,  the  Community  industry  continued  to  reduce  the 
number  of  its  employees  (an  8%  reduction  between  1990  and  1993  was  partly 
compensated  for  in  1994,  but  the  number  of  employees  remained,  in  1994,  4% 
below its level of 1990). 

28 

5.  Conclusion on injury 

(57)  Prices  of  imports  very  substantially  undercut  the  Community  industry's  average 

price, namely by more than 30% (with the exception of the Filipino company related 

to  a  Community  producer  whose  exports  were  too  limited  to  be  considered  as 

representative of Filipino exports). 

(58)  Injury to  the  Community  industry  over the  period  under  examination  mainly  took 

the following form: 

-  Loss  of  market share:  The  Community  producers  have  lost  an  8.5  percentage 
point share between  1990 and  1994 (or even a 15 percentage point  share if  1994 is 
compared with  1992).  Given that,  in terms of volume,  their sales remained stable, 
this means that  Community  producers  have been totally  prevented from benefiting 
from  the market expansion. 

- Insufficient profitability:  The Community industry's overall profitability  remained 
very low (particularly for an industry requiring substantial investments to innovate). 
This results from the fact  that its prices,  heavily undercut,  could  not  be increased, 
even slightly,  over the last five years (despite the fact that the share of the products 
with  special  executions,  normally  more  expensive,  increased).  The  Community 
producers' very  low  level  of  profitability  reached  in  1994,  if  allowed  to  continue, 
will not be sustainable.  This creates a serious risk to see Community producers, in a 
relatively short time, relocating their production outside the Community. 

(59)  In  summary,  the  Community  industry,  which  appeared  to  be  in  the  process  of 
recovering from the effects of past dumping, is still in a very precarious financial and 
market situation and on this basis, it is concluded that it has been adversely  affected 
and has suffered injury which is sufficient for it to be classified  as material. 

29 

F.  CAUSATION  OF  INJURY 

(60)  For  the  purpose  of  determining  whether  the  injury  suffered  by  the  Community 
industry was caused by the Thai, Mexican and Filipino dumped imports and whether 
other  factors  caused  or  contributed  to  that  injury,  the  following  elements  were 
examined: 

1.  Effect of the dumped imports 

* 

(61)  In  examining the  effects  of the dumped  imports,  it was found  that  the  increasing 
volume  and  decreasing  prices  of  the  dumped  imports  coincided with  the  loss  of 
market  share  and  the  deterioration  in  the financial situation  of  the  Community 
industry. 

(62)  Indeed,  between  1990 and  the investigation  period,  the  market  share  held  by the 
dumped  imports  from  the  three  countries  concerned  has  significantly  increased, 
namely from 4.6% to  15%, i.e. by more than  10% of total consumption, while the 
'•  Community  industry's  market  share  decreased  by  more  than  8.5%  of  total 
Community consumption.  In addition, during the investigation period, prices of the 
disposable  flint  lighters imported from Thailand,  the Philippines and Mexico were 
significantly below the prices practised by the Community producers (on average by 
more than 30%). 

Given that the market  in question is highly price  sensitive,  as already  explained at 
recital  51,  it  is  clear  that  this  significant  price undercutting  by  Thai,  Filipino and 
Mexican  dumped  imports,  with  consequentialy  increased  market  share,  has 
significantly  affected  the  Community  industry,  even  more  so  as  the  imported 
products were sold through the same sales channels and to  the  same customers as 
those of the Community industry. 

30 

2.  Effect  of other factors 

(a)  Volume and prices of imports not sold at dumping prices 

(63)  Imports from third countries  other than those subject to  anti-dumping  measures or 
to  the  current  investigations  were  found  to  have  increased  by  34% between  1990 
and  1994.  However,  this increase is not very  significant  in terms  of market  share 
(from  10% in 1990 to  11.3% in 1994). 

(64)  As to the price levels of these imports, it has to be stressed that Eurostatistics data, 
based on a mix of different  lighters, cannot be considered  as a suitable basis for the 
purpose of establishing accurate unit prices.  In any case, no substantiated  evidence 
which would  show  that  the  actual  price  levels  of  these  imports  were  significantly 
undercutting the Community industry's prices was submitted by any interested party. 

(b)  Evolution of demand and pattern of consumption 

(65)  As can be seen from the above (recitals 45 and 46) no contraction in demand or any 
other negative changes in the patterns of consumption took place during the period 
under examination. 

(c)  Trade practices of,  and competition between, third countries 

and Community producers 

(66)  No  evidence  concerning  the  existence  of  restrictive  trade  practices  of  third 

countries, which could have been a source of injury to the Community industry, has 

been  submitted.  As  far  as  competition  between  other  third  countries  and 

Community  producers  is  concerned,  no  other  case  than  that  of  Chinese  imports, 

examined below, appeared to warrant special consideration. 

31 

(d)  Developments in technology, export performance 

and productivity of the Community industry 

(67)  The  ability  of  the  Community  industry  to  follow,  or  even- get  ahead  of,  its 

competitors  as  regard  technological  developments  is  not  in  question  (Community 

producers  have 

indeed  registered  several  valuable " patents  concerning  the 

manufacture of disposable flint lighters). 

(68)  The  Community  industry's  ability  to  compete  on  export  markets  outside  the 

Community  is  also  clearly  established  (Community  producers'  sales  of  disposable 

flint lighters to third countries rose by 14% between 1990 and 1994). 

(69)  The same applies to the  Community industry's productivity  per worker,  which has 

slightly improved between  1990 and 1994. 

(e)  Impact of other imports sold at dumping prices 

(70)  The  case  of the  P.R.  of  China was  found  to  warrant  special  consideration  in this 
context.  This country  indeed  appeared to  have  substantially  increased  its  share  of 
the Community  lighter market over the period  1990 to  1994.  Quantities  exported 
from  the P.R.  of China to the Community were very substantial and prices not only 
dumped  but  also  very  low.  By  Council  Regulation  (EC)  No  1006/95n,  these 
imports were subjected to an increased anti-dumping duty. 

OJ No L 101, 04.05.1995, p. 38. 

32 

All  co-operating  exporters  have  claimed that they were  forced  to  follow  the trend 
set by the Chinese in order to continue to sell.  Although tliis argument is not totally 
unfounded,  it is considered  that the fact that the P.R.  of China has become  one  of 
the  major  players  on  the  market  (largely  through  dumping)  cannot  exempt  other 
exporting  countries,  delivering  quantities which are far from being  negligible, from 
their responsibility for resorting to injurious dumping. 

In addition, this does not detract from the fact that severe competition of low priced 

dumped  imports  from  Thailand,  the  Philippines  and  Mexico  has  significantly 

participated  to  the downward  pressure  put  on  disposable flint lighter  prices  in the 

Community. 

3.  Conclusion  on causation 

(71)  Notwithstanding the fact that another element, namely the dumped imports from the 

P.R.  of  China,  may  have  had  a negative  impact  on  the  Community  industry,  it  is 

considered that dumped imports from Thailand, the Philippines and Mexico have by 

themselves  caused  material  injury to  the  Community  industry.  This  conclusion  is 

based  on  the  various  elements  set  out  above  and  especially  the  level  of  price 

undercutting and the quantities concerned which resulted in a significant  downward 

price pressure. 

33 

G.  CONTINUATION  OR  RECURRENCE  OF  DUMPING  AND  INJURY 
(THAILAND) 

(72)  Since, as explained at recital 4, the interim review in respect of imports originating 
in Thailand was likely not to be concluded before the end of the five year period of 
application  of the measures concerned,  the interim review concerning this country 
has also covered the circumstances due to be examined in the context of an expiry 
review as set out in Article 11 (2) of the Basic Anti-dumping Regulation. 

(73)  In the  course  of this  examination,  carried  out  with  a view  to  determining,  in the 
assumption  that  the  measures  against  Thailand  would  be  due  to  expire,  whether 
such expiry "would be likely to lead to a continuation or recurrence of dumping and 
injury", the following elements were found to be relevant: 

-  since,  already  before  any  foreseeable  expiry,  the  Thai  imports  concerned  have 
continued  to  be  dumped  (moreover  at  a  higher  level  than  the  one  originally 
.established), it is considered  highly unlikely that the expiry  of the  measures could 
result in, or even coincide with, the disappearance of dumping; 

- similarly, as regards the injury analysis, it should be noted that, had the conclusion 
on cumulation not been reached  and therefore  had Thai imports been examined in 
isolation,  they would  still  have been  found  injurious  to  such  an  extent  (given the 
results  of  the  investigation  as to  the  volume  and  prices  of  such  imports)  that  an 
increase  in  the  level  of  the  applicable  anti-dumping  duty  would  have  been 
warranted.  This finding, made in consideration  of the existence (and  level) of the 
current measures, would be strengthened,  if anything, in the light  of their possible 
expiry. 

34 

(74)  Accordingly, it is considered that, since the persistent  injurious  dumping is such as 
to  make the  amendment  of  the  existing  measures  against  Thailand  warranted,  it 
follows that the expiry of the measures would be likely to lead to a continuation of 
dumping and injury and that the measures against Thailand should not be allowed to 
lapse. 

H.  COMMUNITY INTEREST 

(75)  In  assessing  whether  it  is  in  the  Community's  interest  to  take  or  modify  anti 
dumping  measures  in  respect  of  imports  of  disposable  flint  lighters  from  the 
countries  concerned  which  have  been  dumped  and  have  caused  injury  to  the 
Community industry concerned, the views of all parties involved in the proceeding 
were  considered.  This  examination  was  carried  out  with  a  view  to  determining 
whether  compelling  reasons  existed  which  would  make  anti-dumping  measures 
unwarranted. 

1.  Community  industry 

(76)  Unless  measures  are  taken  in  respect  of  Mexican  and  Filipino  imports  and  the 
current  measures  in  respect  of  Thailand  amended  in  such  a  way  that  causes  the 
Mexican, Filipino  and  Thai lighter  prices to  increase  significantly,  it  is  considered 
that the Community industry will have to lower further its prices or will lose market 
share  at  an  increased  rate. 
In  both  situations,  the  financial  situation  of  the 
Community industry will worsen.  As a consequence, production in the Community 
will no longer be viable and might have to cease, resulting in loss of jobs in both the 
industry itself and related sectors. 

35 

Also, the revenues required for investment in research and development  of products 
in line  with  lighter  safety  standard  and  more  sophisticated  production  techniques, 
which are vital in maintaining competitiveness in a highly competitive sector, will be 
drastically  reduced.  Consequently,  the  Community  industry  could  then,  after  a 
relatively short period of sustained losses, do nothing but withdraw from production 
in the Community. 

It  is  therefore  justified  to  give  the  disposable  lighter  industry,  which  has  a  long 
history  of  investment  and  resultant  innovation  in  the  Community,  the  chance  to 
survive  by  removing  the  distortion  effects  of  dumping  and  thus  securing 
employment and future investment. 

2.  Consumer interest 

(77)  No  information  relating  to  the  Community  interest  issue  has  been  received from 

consumer organisations.  The disposable lighter is an inexpensive product which, in 

general, is bought without special preference.  Although differences  in prices appear 

to  have  a  determining  effect  on  consumers'  choice  between  different  lighters,  the 

absolute level  of prices does not  seem to  have any influence  on the decision to buy 

or not to buy such a disposable product.  Therefore,  a price increase,  at the level of 

the importer and partly or wholly reflected throughout the distribution chain, will be 

likely  to  have  no  material  impact  on  the  total  consumption  of  disposable  flint 

lighters. 

It  should  also  be  stressed  that,  given  the  usual  mark up  between  the  CIF  import 

price and the retail price, the lighter distribution chain is likely to be able to absorb 

most of the impact on the consumer of price increase which would result from anti 

dumping measures.  Additionally, it should be noted that price increases, if any, will 

not have a major impact on the budget of the consumer due to the low unit price of 

this item and the very limited amount spent on it per individual. 

36 

3.  Conclusion 

(78)  Having  examined  the  various  interests  involved,  it  is  concluded  that  it  is  in  the 
Community  interest  to  impose  anti-dumping  measures  to  eliminate  the  injurious 
effects  of  the  dumped  imports  under  consideration  and  that,  conversely,  no 
compelling reasons exist which would make such measures unwarranted. 

Indeed,  failure  to  take  action  could  mean  disappearance  of  production  in  the 
Community  and,  consequently,  loss  of  employment  and  lack  of  investment.  The 
price increase and the consequent relatively little extra cost for the consumer can by 
no  means  be  considered  to  be  of  the  same  magnitude  as  the  cost  of  the  total 
disappearance of a Community industry. 

I.  ANTI-DUMPING  MEASURES 

1.  Injury elimination level 

(79)  In accordance with the relevant provisions of the Basic Anti-dumping Regulation, it 
was  examined  whether  the  measures  should  be.  less  than  the  dumping  margins 
found,  if  such  lesser  measures  would  be  adequate  to  remove  the  injury  to  the 
Community industry.  For that purpose, it was  considered that the  selling  prices  of 
each  exporter  to  unrelated  importers,  adjusted  to  duty  paid,  customer  delivered 
levels  (or,  where  sales  were  to  a  related  importer,  the  resale  price  to  the first 
independent  customer)  should be compared to selling prices established at the same 
level  of trade and reflecting  the Community producers' cost  of production together 
with a reasonable amount of profit. 

37 

(80)  For that purpose, it was considered that only those lighters with an equal  or almost 

equal  amount  of gas,  and therefore  a similar number of  ignitions,  should  be taken 

into account.  As to the amount of profit considered as reasonable, it was examined 

whether  the  amount  of  profit  used  in  the  previous  proceedings  concerning 

disposable flint lighters, namely a margin of  15% on turnover, could be expected to 

be attained in the absence of the dumped imports concerned. 

(81)  In this respect, it has to be recalled that the dumped imports from the P.R.  of China 
may also have had a negative impact on the Community industry  during the period 
under  examination.  Accordingly,  in  order  to  ensure  that  the  remedy  sought  in 
respect  of  the  dumped  imports  from  the  three  countries  concerned  remains 
proportionate,  it was considered  appropriate and not unreasonable  that the amount 
of profit used in the current injury elimination level  calculations  be limited to  10%. 
This limitation of the profit  margin to  10% was considered  appropriate in order to 
take account  of the other factor  of injury which may have affected  the  situation  of 
the  Community  industry  during the period  currently under  examination.  It  should 
not,  therefore,  be  interpreted  as  entailing  a  global  reconsideration  of  previous 
findings  in respect of the lighter industry's reasonable profitability. 

(82)  The injury elimination  level  calculations  carried  out  on the  above  basis  resulted in 

the  average  underselling  margins,  expressed  as  a  percentage  of  the  free  at 

Community frontier price, to be higher than the corresponding  dumping margins in 

the  case  of  the  Thai  exporter  Thai  Merry,  as  well  as  in  the  case  of  the  Mexican 

producer JMP (whose products are exported by Scripto Tokai Corp. USA). 

38 

For  the  Filipino  co-operating  producers,  the  average  underselling  margins, 
expressed  as  a  percentage  of  the free at  Community frontier price,  found  to  be 
lower than the corresponding dumping margins, were: 

- production by Iwax Philippine Inc., and Iwahori Philippines 
Inc. and exports by Iwax Inc. Japan (single margin): 

- Swedish Match Philippines, Inc. 

43% 

17% 

2.  Case of the Thai company Politop 

(83)  As mentioned  above, at the  end  of the original investigation  concerning  Thailand, 
the  company  Politop  had  an  individual  anti-dumping  duty  based  on  its  dumping 
margin  (namely  5.8%)  imposed.  On  the  occasion  of  the  current  review,  this 
producer also co-operated but was unable to provide any data on the basis of which 
new dumping and injury  margins could  be calculated.  Indeed,  this producer  only 
exported  small  quantities  to  the  Community  in  1992  and  did  not  export  to  the 
Community any disposable flint lighters since then. 

(84)  From 

the 

(notably 

examined 

company's 

the  documents 

commercial 
correspondence),  it emerged that this situation  came about  as a result  of Politop's 
refusal to sell at prices below cost.  Arguing that its behaviour had been consistently 
fair over the past four years, Politop claimed that the increased  residual duty likely 
to be established for Thailand should not apply to its exports to the Community and 
requested to be granted a 0% duty rate, or at least that the current  5.8% duty rate 
be maintained. 

39 

(85)  In seeking an appropriate solution, it was found that since Politop entirety ceased to 

export  to  the  Community,  the  best  available  information  in  its  case  could  not  be 

considered  to  be the  residual  dumping  margin determined  during the  investigation 

period. 

(86)  In these circumstances, the best available information  appeared to be Politop's own 

data  from  the  previous  investigation. 

It  was  therefore  considered  that  the 

maintaining  of  Politop's  current  duty  rate  (5.8%)  should  constitute  the  most 

appropriate solution to its very specific situation. 

3.  Undertakings 

(87)  Having been informed of the essential facts and considerations on the basis of which 
it  was  intended  to  recommend  the  repealing  of  the  existing  measures  concerning 
Thai  imports  and  the  imposition  of  definitive  anti-dumping  duties  in  respect  of 
imports  originating  in  the  three  countries  concerned,  one  Thai  producer,  the  sole 
^Mexican  producer  and  the  two  related  Filipino  producers  offered  undertakings 
concerning their exports of the product concerned to the Community. 

After  examination  of  these  offers,  the  Commission  considered  the undertakings  as 
acceptable  since they would  eliminate the injurious  effects  of dumping pursuant  to 
Article  8 (1)  of  the  Basic  Anti-dumping  Regulation.  Furthermore,  given  in 
particular the type of sales channels of the exports concerned (which are made either 
to related parties or sole importers in the Community), it was considered that these 
undertakings could be monitored  effectively. 

40 

(88)  The  Commission  consulted  the  Advisory  Committee  on  the  acceptance  of  these 
undertakings  and  no  objections  were  raised.  The  undertakings  offered  were 
accepted by Commission Decision 97/.. ./EC12. 

4.  Individual and residual  duties 

(89)  Notwithstanding  the  acceptance  of  the  undertakings  offered  by  certain  Thai, 

Mexican and Filipino producers: 

- the measures in force in respect of Thailand should be repealed; 

-  individual  duties should be imposed in respect of imports from the Thai company 

Politop  (at  the  rate  of  5.8%,  as  explained  at  recitals  83  to  86)  and  the  Filipino 

company  Swedish Match Philippines, Inc., which did not offer  any undertaking  (at 

the level of the lesser margin mentioned at recital 82, namely 17%); 

- residual duties should be imposed on imports of the product concerned originating 
in Thailand,  the Philippines  and Mexico,  in order to  underpin the  undertakings by 
avoiding their circumvention. 

12  See page xx of this Official Journal. 

41 

Given the level  of co-operation  obtained from the three countries  concerned  (close 

to  100%), the residual  definitive  duties should be imposed, for each country,  at the 

level  established  for  the  co-operating  company  with  the  highest  dumping  margin, 

(i.e.  on  the  basis  of  the  latter  company's  dumping  margin  or,  where  appropriate, 

underselling margin).  On this basis, the residual duties should be set at 51.9% in the 

case  of  Thailand,  43.0%  in the  case  of  the  Philippines  and  27.1% in  the  case  of 

Mexico, 

HAS ADOPTED THIS REGULATION: 

Article J 

Regulation  (EEC) No  3433/91,  as amended by Regulation  (EC) N°  398/94,  imposing a 
definitive  anti-dumping  duty on imports of gas-fuelled,  non-refillable  pocket flint lighters 
originating, inter alia, in Thailand, is hereby amended as follows: 

1. 

at Article  1 (1), in fine, the words "and Thailand" shall be deleted; 

2. 

paragraph (d) of Article  1  (2) shall be repealed. 

Article 2 

1.  Definitive  anti-dumping  duties  are hereby  imposed  on imports  of gas-fuelled,  non-
refillable  pocket  flint  lighters  falling  within  CN  Code  ex  9613  10  00  (Taric  code 
9613  10 00*10) originating in Thailand, the Philippines and Mexico. 

42 

2. 

The  rate  of  the  duties,  applicable  to  the  net, free-at-Community-frontier price, 
before duty, shall be as follows: 

(a) 51.9% for imports originating in Thailand (Taric additional code  8900) with the 

exception of imports which are produced  and sold for export to the Community by 

Politop  Co.  Ltd,  Bangkok  where  the  rate  shall  be  5.8%  (Taric  additional  code 

8937); 

(b)  43.0% for  imports  originating  in the  Philippines  (Taric  additional  code  8900) 
with  the  exception  of  imports  which  are  produced  and  sold  for  export  to  the 
Community  by  Swedish  Match  Philippines,  Inc.,  Manila  where  the  rate  shall  be 
17.0% (Taric additional code 8938); 

(c) 27.1% for imports originating in Mexico (Taric additional code 8900). 

3.(a)  The duties referred to in paragraph 2 (a) shall not apply to gas-fuelled,  non-refillable 
pocket flint lighters produced  and sold for export to the Community by Thai Merry 
Co., Ltd. Samutsakorn (Taric additional code 8542); 

(b)  The duties referred to in paragraph 2 (b) shall not apply to gas-fuelled,  non-refillable 

pocket  flint  lighters produced by Iwax Philippine,  Inc., Rosario,  Cavité,  or Iwahori 

Philippines,  Inc.,  Mariveles,  Bataan  and  sold  for  export  to  the  Community  by 

themselves or by Iwax Inc., Shizuoka, Japan (Taric additional code 8939); 

(c)  The duties referred to in paragraph 2 (c) shall not apply to gas-fuelled,  non-refillable 

pocket flint  lighters produced by JMP Mexico,  S.A.  de C.V.,  Tijuana,  and sold for 

export to  the  Community by  Scripto  Tokai  Corp., Fontana,  USA  (Taric  additional 

code 8940). 

43 

4.  Unless  otherwise  specified,  the provisions in force  concerning  customs  duties shall 

apply. 

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 

For the Council 
The President 

^9 

ISSN 0254-1475 

COM(97) 62  final 

DOCUMENTS 

EN 

02  11 

Catalogue number  :  CB-CO-97-055-EN-C 

ISBN  92-78-16104-7 

Office  for  Official  Publications of the  European  Communities 

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