Commission Regulation (EC) No 1833/98 of 25 August 1998 imposing a provisional anti-dumping duty on imports of bicycles originating in Taiwan
Date: 1998-08-25
Institutions: European Commission
Subjects: Taiwan, anti-dumping duty, import, originating product, two-wheeled vehicle

L 238/10

EN

Official Journal of the European Communities

26. 8. 98

COMMISSION REGULATION (EC) No 1833/98

of 25 August 1998

imposing a provisional anti-dumping duty on imports of bicycles originating in
Taiwan

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries not members of the European Union (1), as
amended by Regulation (EC) No 905/98 (2), and in partic-
ular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(6)

(7)

(8)

(1)

(2)

(3)

(4)

(5)

1997,

26 November

the European Communities (3)

On
the Commission
announced by a notice published in the Official
the
Journal of
initiation of an anti-dumping proceeding with
regard to imports into the Community of bicycles
originating in Taiwan and commenced an invest-
igation.

The proceeding was initiated as a result of a
complaint lodged in October 1997 by the Euro-
pean Bicycle Manufacturers’ Association (EBMA)
representing a major
on behalf of producers
proportion of
the Community production of
bicycles. The complaint contained evidence of
dumping of the said product and of material injury
resulting therefrom, which was considered suffi-
cient to justify the initiation of a proceeding.

The Commission officially advised the exporting
producers and importers known to be concerned as
the representatives of
well as their associations,
Taiwan and the complainant Community produ-
cers about the initiation of the proceeding.

Interested parties were given the opportunity to
make their views known in writing and to request a
hearing. A number of exporting producers
in
Taiwan, as well as complainant Community produ-
cers, importers, traders and consumer organisations
made their views known in writing. All parties who
so requested were granted a hearing.

In view of the large number of Community produ-
cers
the
Commission decided to make use of sampling

expressly supporting the

complaint,

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ C 360, 26. 11. 1997, p. 5.

techniques and sent questionnaires to and received
detailed information from a representative sample
of complainant Community producers, as set out in
recitals 46 to 47.

In view of the large number of exporting producers
in Taiwan, sampling was also used with regard to
them and the Commission sent questionnaires to
and received detailed information from a represent-
ative sample of exporting producers, as set out in
recitals 21 to 25.

The Commission also sent questionnaires
importers known to be concerned.

to

The Commission sought and verified all the infor-
mation it deemed necessary for the purpose of a
preliminary determination of dumping and injury,
including the carrying out of verification visits at
the premises of the following sampled companies:

(a) Community producers

(cid:190) Cycleturope International SA., Romilly sur

Seine,

(cid:190) Derby Cycle Werke GmbH, Cloppernberg,

(cid:190) Kynast AG, Quakenbr(cid:129)ck,

(cid:190) Tunturypyora OY, Turku,

(cid:190) Bianchi FIV SPA, Treviglio,

(cid:190) Batavus BV, Heerenveen,

(cid:190) Monarch Crescent AB, Varberg,

(cid:190) BH SA/BIALSA SA, Vitoria,

(cid:190) Raleigh Industries Ltd, Nottingham;

(b) Exporting producers in Taiwan

(cid:190) Fritz Jou Manufacturing Co., Ltd, Taichung,

(cid:190) Giant Manufacturing Co., Ltd, Taichung,

(cid:190) Merida Industry Co., Ltd, Yuanlin,

(cid:190) Ming Cycle Industrial Co., Ltd, Taichung,

(cid:190) Overlord Industries Corp., Tainan;

(c) Related importers in the Community

(cid:190) Giant Europe B.V, Lelystad,

(cid:190) Giant Deutschland GmbH, D(cid:129)sseldorf,

(cid:190) Giant Holland B.V, Lelystad,

(cid:190) Merida-Fahrrad-Vertriebs GmbH, Engels-

kirchen.

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Official Journal of the European Communities

L 238/11

(9)

(10)

(11)

(12)

(13)

The investigation of dumping covered the period
from 1 November 1996 to 31 October 1997 (here-
inafter referred to as ‘the investigation period'). The
examination of injury covered the period from 1
January 1994 up to the end of the investigation
period.

B. PREVIOUS PROCEEDINGS

In October 1991, an anti-dumping investigation
was already initiated against imports of bicycles
originating in Taiwan and the People’s Republic of
China which resulted in the imposition of a defin-
itive anti-dumping duty of 30,6 % against imports
from China (1). As the dumping margin for imports
of bicycles originating in Taiwan was found to be
de minimis,
the proceeding concerning these
imports was terminated (2).

In April 1996, the Commission initiated an invest-
igation into the circumvention of the anti-dumping
duty imposed on imports of bicycles originating in
China, as a result of which in January 1997 the
Council extended the definitive anti-dumping duty
imposed on Chinese bicycles to imports of certain
bicycle parts from China (3).

In February 1994, another anti-dumping invest-
igation had been initiated against
imports of
bicycles originating in Indonesia, Malaysia and
Thailand which resulted in the imposition of defin-
itive anti-dumping duties of up to 29,1 % for Indo-
nesia, 39,4 % for Malaysia and 39,2 % for Thai-
land (4).

C. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

The present proceeding, as the previous proceed-
ings mentioned above, covers all types of bicycles
and other cycles (including delivery cycles) not
motorised, with or without ball bearings (herein-
after referred to as ‘bicycles'). The investigation has
shown that several hundred models of bicycles
produced in Taiwan were sold in both the Tai-
and the Community markets. Their
wanese
number depends on the specific features
that
producers combine in assembling their bicycles.
Despite variations stemming from such combina-
tions, it should be noted that all different models of
bicycles available on both markets were found to
have the same basic physical and technical charac-
teristics and uses.

(1) OJ L 228, 9. 9. 1993, p. 1.
(2) OJ L 227, 8. 9. 1993, p. 21.
(3) OJ L 16, 18. 1. 1997, p. 55.
(4) OJ L 91, 12. 4. 1996, p. 1.

(14)

For the purpose of the analysis carried out in the
present investigation, the above defined bicycles
were classified in four basic categories, mainly
according to their use:

(A) all

terrain bicycles or ATB, sometimes also

called mountain bicycles or MTB;

(B)

trekking, city, hybrid and touring bicycles;

(C)

junior action and children’s bicycles;

(D) other bicycles (including racing bicycles and

all other cycles).

(15)

It should be noted that there are no clear dividing
lines between the various categories above as they
overlap. In a number of cases, one bicycle type can
be classified in two or more categories. In other
cases, the addition of one or more features could
change the classification of a bicycle from one
category to another. In addition, consumers will
regularly use a bicycle classified in a particular
category for a variety of different purposes. They
were,
therefore, regarded as forming one single
product for the purpose of this proceeding.

2. Like product

by

produced

(16) Due to the high number of models, it is rare that
identical models can be found when comparing
bicycles produced in Taiwan and exported to the
Community, with those produced and sold in
Taiwan and with those
the
Community industry and sold on the Community
market. Even though these bicycles are rarely iden-
tical, they share the same basic technical and phys-
ical characteristics. In any event the investigation
has shown that any differences in the product
concerned cannot lead to the conclusion that the
product produced and sold by the Community
industry in the Community market or the product
produced by the exporting producers and sold on
their domestic market cannot be considered as a
like product to the product concerned.

(17) Comments made by Taiwanese exporting produ-
cers were rather contradictory as to whether their
exports to the Community and bicycles produced
and sold by the Community industry were like
products.

Some stated that the bicycles they export to the
Community were of
lower quality than those
produced by the Community industry.

Whereas the investigation has confirmed that some
bicycles imported from Taiwan are not in the high
quality range,
some
Community producers were also producing and
selling bicycles of the same range.

it has also revealed that

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Official Journal of the European Communities

26. 8. 98

(18)

and

not
ones

By contrast, other exporting producers in Taiwan
claimed that their bicycles were not interchange-
comparable with
able
therefore
Community produced
the
because
advanced technology used in their production. As
an example it was mentioned that aluminium
frame bicycles were hardly ever produced by
Community producers, aluminium being consid-
ered a high-tech material. Therefore, they claimed
that their product is not a like product to the one
of the Community industry.

of

The investigation has
shown that Community
producers do produce aluminium bicycle frames
although in the last few years aluminium frames
have been mainly imported from Asian countries
such as China because the import price of these
frames is lower than the respective cost of produc-
tion in the Community. Nevertheless, bicycles with
aluminium frames
the
are
Community industry.

produced

by

(19) On the basis of the above information, and in the
absence of evidence which would demonstrate that
Taiwanese bicycles are not
interchangeable and
comparable with Community produced ones, the
Commission considers the above claims to be
unfounded. It is therefore concluded that bicycles
produced in Taiwan and sold on its domestic
market and bicycles produced and sold by the
Community industry on the Community market,
and bicycles exported to the Community from
Taiwan are like products,
in accordance with
Article 1(4) of Regulation (EC) No 384/96 (herein-
after referred to as the ‘Basic Regulation').

D. SAMPLING OF EXPORTING PRODUCERS IN

TAIWAN

1. General

(20)

In view of the large number of exporting producers
in Taiwan,
the Commission decided to apply
sampling techniques in accordance with Article 17
of the Basic Regulation.

sector. The authorities of Taiwan were in this
context also contacted by the Commission.

2. Pre-selection of the sample

(21)

37 companies
in Taiwan came forward and
provided the requested information within the time
period set. However, only 31 of
them were
exporting producers, the rest being traders. Those
companies, which sold for export own produced
bicycles to the Community during the invest-
igation period and expressed a wish to participate
in the sample, were considered as cooperating and
were taken into account in the selection of the
sample. They represented around 85 % of total
import volume from Taiwan into the Community.

(22)

The cooperating companies which were not finally
retained in the sample, were informed that any
anti-dumping duty on their exports would be
calculated in accordance with the provisions of
Article 9(6) of the Basic Regulation.

(23) Companies which did not make themselves known
within the time period set were considered as non
cooperating companies.

3. Selection of the sample

(24)

(25)

The choice of the sample was made in agreement
with the exporting producers and their association
concerned. The Taiwanese authorities were kept
informed. The five companies
selected in the
sample and which fully cooperated with the invest-
igation were attributed their own dumping margin
and individual duty rate.

The Commission also selected a reserve company
which, though having to reply to the questionnaire,
would only be investigated in the event
that
companies in the main sample would subsequently
refuse to cooperate. This company was
also
informed that any anti-dumping duty on its exports
would be calculated in accordance with the provi-
sions of Article 9(6) of the Basic Regulation, unless
it was selected to replace a company in the original
sample in which case it would have its own
dumping margin and individual duty rate.

In order to enable the Commission to select a
sample, exporting producers were, pursuant
to
Article 17(2) of the Basic Regulation, requested to
make themselves known within three weeks of the
initiation of the proceeding and to provide basic
information on their export and domestic sales, the
stages of production performed and the names and
activities of all related companies in the bicycle

4. Individual examination of companies not

selected in the sample

(26)

The Commission received from two companies not
selected in the sample requests
individual
examination. However, both requests were not

for

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Official Journal of the European Communities

L 238/13

accompanied by a reply to the questionnaire within
the deadline set for this purpose, as required by
Article 17(3) of the Basic Regulation. Therefore, the
requests were rejected and the companies in ques-
tion were informed accordingly.

E. DUMPING

1. Normal value

(a) Global representativeness

(27)

In accordance with Article 2(2) of the Basic Regula-
tion, the Commission first examined whether the
domestic sales of bicycles by each exporting
producer were representative, i.e. whether the total
volume of such sales was greater than or equal to
5 % of
the corresponding
export sales to the Community.

the total volume of

This assessment
three exporting
revealed that
producers had representative sales of bicycles on
the domestic market during the investigation
period. Two exporting producers had minor
domestic sales which were less than 5 % of the
corresponding export sales to the Community. For
these two exporting producers normal value was
constructed in accordance with Article 2(3) of the
Basic Regulation.

(b) Product type comparability

(28) As

in

previous

anti-dumping

proceedings
concerning bicycles, the Commission found that
the comparison of domestic and export models of
bicycles was extremely difficult due to the exis-
tence of a considerable variety of combinations of
features. Under these conditions and in order to
avoid numerous adjustments, most of which would
have had to be based on estimations, it was provi-
sionally decided to establish normal value for the
three
exporting producers with representative
domestic sales on the basis of constructed values in
accordance with Article 2(3) of the Basic Regula-
tion. The use of constructed value, relying on
production costs of
takes
account of all combinations of features mentioned
above.

the exported models,

(c) Normal value based on constructed value

(29)

The constructed value was determined by adding to
the manufacturing cost of the exported models of
each exporting producer, a reasonable amount for
selling, general and administrative expenses (here-

inafter referred to as ‘SG & A') and a reasonable
amount for profit.

(30)

The Commission subsequently examined whether
the domestic sales of each of the three exporting
producers with representative domestic sales could
be considered as being made in the ordinary course
of trade pursuant to Article 2(4) of the Basic Regu-
lation.

(31)

(32)

(33)

It was found that all three exporting producers in
question had sold during the investigation period
more than 20 % but less than 90 % of their sales
in the domestic market at a loss, i.e. at prices below
manufacturing cost plus SG & A. Therefore, it was
considered that in establishing constructed normal
value the weighted average profit released by each
of the three exporting producers on their profitable
domestic sales only should be used.

For the three exporting producers with represent-
ative domestic sales the amount for SG & A and
profit used were those respectively incurred and
realised by these companies. For the two exporting
producers without representative domestic sales,
the weighted average of the actual amounts for
SG & A and profit determined for
the three
exporting producers with representative domestic
sales were used in accordance with Article 2(6)(a) of
the Basic Regulation.

2. Export price

selected

In general, sales of bicycles made by the exporting
producers
on the
in the
Community market were made to independent
customers. Consequently the export price was
established by reference to the prices actually paid
or payable in accordance with Article 2(8) of the
Basic Regulation.

sample

Two exporting producers sold significant volumes
of bicycles in the Community market
through
related importers
located in different Member
States. For these transactions the export price was
constructed on the basis of the price at which the
imported products were first resold to an inde-
pendent buyer in accordance with Article 2(9) of
the Basic Regulation. In constructing the export
price, the Commission took account of all costs,
incurred between
including duties
and taxes,
importation and resale to the first
independent
buyer and of profits normally accruing, so that a
reliable export price could be established at the
Community frontier level. The profits used were
established on the basis of information obtained
from co-operating unrelated importers.

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26. 8. 98

3. Comparison

(34)

For the purpose of ensuring a fair comparison
between normal value and export price, due allow-
ances in the form of adjustments were made where
applicable and justified for differences affecting
price comparability in accordance with Article
2(10) of the Basic Regulation.

for

differences

Adjustments were made
in
discounts, rebates, transport, handling, loading and
ancillary costs, ocean freight, ocean freight, ocean
insurance, credit, after-sales costs, commissions
and, as described in detail below, for differences in
levels of trade.

(35)

Four exporting producers requested an adjustment
to normal value for differences in levels of trade
including differences arising in OEM (original
equipment manufacturer) sales.

The investigation has shown that exporting produ-
cers confused export sales to OEM customers with
sales of non-branded products to distributors and
that the requested adjustment referred to sales of
non-branded versus branded products rather than
to OEM sales versus sales through other channels.

(36)

could

The Commission first examined whether such an
adjustment
under Article
2(10)(d)(i) of the Basic Regulation. Only two of the
exporting producers who requested such an adjust-
ment had representative domestic sales.

granted

be

One company, with representative domestic sales
which requested a level of trade adjustment, had
domestic sales of branded products made to distrib-
utors and retailers and exports of branded and non-
branded products made
to distributors. The
company based its request on an overall difference
in prices between domestic sales to distributors and
to retailers. However, the company failed to show
any consistent and distinct difference in functions
and prices of the seller for the different levels of
trade in the domestic market as required under
Article 2(10)(d)(i) of the Basic Regulation. There-
fore, the adjustment for differences in levels of
trade, as requested, was not considered justified as
far as it was based on the ground that export sales
were made to distributors while domestic sales were
made to both distributors and retailers, without
consistent and distinct difference in functions and
prices.

(38)

This company had only sold branded products in
the domestic market mainly to retailers and had
made exports of branded and non-branded prod-
ucts to distributors. The company quantified the
alleged differences in levels of trade by claiming an
adjustment corresponding to the expenses incurred
in the domestic market
sales
promotion, warehousing
sales/marketing
personnel salaries. It should be noted that adjust-
ments claimed on the basis of the abovementioned
expenses are not by themselves sufficient to justify
differences in functions related to the particular
levels of trade. Therefore, no adjustment could be
made on this basis.

for advertising,
and

investigation showed however,

The
that one
exporting producer, who had not requested a level
of trade adjustment, sold only non-branded prod-
ucts both to distributors in the domestic market
and to distributors in the export market. The exis-
tence of the same level of trade in the domestic
market for non-branded products, as in the export
market, allowed the Commission to quantify an
adjustment for level of trade pursuant to Article
2(10)(d)(i) of the Basic Regulation. The amount of
the adjustment was based on the difference
between the gross margin realised by the company
with domestic sales of non-branded products to
distributors and the gross margins realised by the
other companies with representative domestic sales
of branded products. For the companies without
representative domestic sales, the amount of the
adjustment was based on the average adjustment
granted to the companies with representative
domestic sales. This was because in the construc-
tion of normal value for the companies without
representative domestic sales, the SG & A and the
profits of
companies with representative
the
domestic sales were used.

4. Dumping margins

(a) Methodology

(39)

The weighted average constructed normal value by
model, as determined in recitals 29 to 31 above,
was compared on an ex-factory basis with the
weighted average export price by model, as deter-
mined in recitals 32 and 33 above.

(b) Dumping margins for companies in the sample

(37)

The other company with representative domestic
sales claimed that the relevant levels of trade were
absent in the domestic market.

(40)

The comparison, as described in recitals 34 to 39
above, showed the existence of dumping in respect
of all companies which fully cooperated in the

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L 238/15

investigation. The dumping margins thus estab-
lished vary and, therefore, the Commission calcu-
lated a weighted average dumping margin for each
exporting producer. The provisional dumping
margins expressed as a percentage of the cif import
price at the Community frontier duty unpaid are
the following:

(cid:190) Fritz Jou Manufacturing Co. Ltd

10,2 %

(cid:190) Giant Manufacturing Co. Ltd

(cid:190) Merida Industry Co. Ltd

(cid:190) Ming Cycle Industrial Co. Ltd

(cid:190) Overlord Industries Corp.

2,4 %

2,5 %

2,5 %

18,2 %.

(c) Dumping margin for cooperating companies

not in the sample

(41) Cooperating companies not selected in the sample
(see recitals 22, 25 and 26 above) were attributed
the average dumping margin of the companies in
the sample, weighted on the basis of their export
a
volume
percentage of
the
Community frontier duty unpaid, this provisional
dumping margin is 5,4 %.

to the Community. Expressed as

import price

the

cif

at

(42)

(d) Dumping margin for non-cooperating com-

panies

For non-cooperating companies a dumping margin
was determined on the basis of the facts available
in accordance with Article 18 of the Basic Regula-
tion. Since the level of cooperationg was high (see
recital 21 above), it is considered appropriate to set
the dumping margin for non-cooperating com-
panies at the level of the highest dumping margin
established for a company in the sample. Indeed, it
would constitute a bonus for non-cooperation and
the
circumvention to assume
encourage
dumping margin attributable to non-cooperating
export producers is lower than that found for a
cooperating export producer.

that

(44)

(45)

(46)

This provisional dumping margin expressed as a
percentage of
the
the
Community frontier duty unpaid,
therefore
18,2 %.

import price
is

cif

at

F. COMMUNITY INDUSTRY

1. Representativeness

(43)

Before the initiation of the investigation and in
order to confirm the necessary support
for the
complaint, the Commission requested all known
producers in the Community to submit basic infor-
mation as to their respective production volume
and to clarify their position with regard to the

rep-
complaing lodged. Community producers
resenting around 60 % of the total Community
production expressly supported this complaint.

By virtue of Article 4(1) of the Basic Regulation, the
Commission investigated whether or not producers
supporting
themselves
imported some of the allegedly dumped bicycles
from Taiwan, should be excluded from the deter-
mination of Community production.

complaint, who

the

those imports were relatively
It was found that
in relation to the total production in the
small
Community of the said producers and that their
core interests were thus considered to be in the
Community. It was established that the limited
imports made by the said producers were a de-
fensive reaction against low priced imports from
Taiwan and not made because these producers were
not able to produce the types of bicycles imported.
On this basis, it was decided that such producers
should not be
exluded in determining the
Community production. Data relating to these
imports were disregarded when the injury factors
pertinent
the Community
industry were established.

to the situation of

It follows that in accordance with Articles 4(1) and
5(4) of the Basic Regulation the Community produ-
cers
the
supporting the
their collective output
Community industry as
represents a major proportion of total Community
production
the
‘Community industry').

(hereinafter

complaint

constitute

referred

to

as

2. Sampling and selection of the sample

In view of the large number of Community produ-
cers expressly supporting the complaint, the invest-
igation into the situation of
the Community
industry as such was, by using sampling, limited to
a reasonable number of parties belonging to this
industry. In accordance with the provisions of
Article 17 of the Basic Regulation, the Commission
selected a sample of Community producers (here-
inafter referred to as ‘the sample') covering a repres-
entative variety of company sizes,
integration of
production and product mix, as well as a large
volume of production. For the selection, account
was also taken of the importance of imports of
Taiwanese bicycles in the various Member States
with the aim of covering as large a part as possible
of the whole Community territory.

Such sample, selected from a significantly larger
group of complaining companies,
therefore
considered to be representative of the Community
industry.

is

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Official Journal of the European Communities

26. 8. 98

(47) Questionnaires were sent to 12 Community produ-
cers of which 10 were originally intended to be part
of the sample and two were considered as reserves.

Due to the bad situation in the bicycle business in
the Community, one of the selected producers had
to close down and another, who was close to bank-
ruptcy, was obliged to completely reorganize its
activities in January 1997 and was thus not in a
position to complete the Commission question-
naire. One relatively small producer who was also
in the process of internal restructuring did not have
sufficient staff to allow them to cooperate with the
Commission.

As the remaining nine companies, including those
initially selected as reserves, were considered to
the
constitute still a representative sample of
Community industry (around 40 % of
its total
volume of operations in eight Member States), it
was not considered necessary to include any other
companies in the sample.

G. INJURY

(48)

The injury situation of the Community industry
has been assessed on the basis of two categories of
information.

capacity,

The first category of information relates to global
injury indicators such as consumption, imports as
well as Community industry’s sales, market share,
production,
capacity utilisation and
employment. These data were collected from the
Member States, the national bicycle associations,
the complaining Community producers and from
the Community wide databases (Comext and Euro-
stat). As far as data stemming from the complaining
companies are concerned, they were cross-checked,
as far as possible, at the level of the national bicycle
associations and Member States.

information relates to
The second category of
i.e.
certain performance-related injury indicators,
profitability, prices
and their evolution, price
undercutting and price underselling. They were
collected at
individual Community
the level of
producers in the sample.

2. Imports of dumped bicycles from Taiwan

(a) Volume, value and relative market share of

Taiwanese imports

(50) On the basis of the statistics available, between
1994 and the investigation period, the volume of
imports of bicycles originating in Taiwan increased
by 25 % and their value increased by 1 %. This
indicates a negative average trend in the import
price. The main increases in volume occurred in
1996 (+286 000 units) and during the investigation
period (+261 000 units). The increase in Tai-
wanese imports fully covers the slight improvement
in consumption between 1996 and the invest-
igation period as well as the decreases in imports
from China (–63 000 units), after the imposition
of anti-dumping measures at the end of 1993, and
in imports from Malaysia, Indonesia and Thailand
(–496 000 units), after measures were imposed at
the end of 1995.

(51) Analysis of the data collected at the level of the
sampled Taiwanese exporters showed that 60 % of
imports are MTB (category A), 13 % are city, trek-
king or hybrid bicycles (category B), 23 % are
children’s bicycles (category C) and 4 % are all
other types of bicycles (category D).

(52) During the whole period under analysis, market
share increased by 50 % in terms of volume and by
14 % in terms of value, i.e. from 11,7 % to 17,5 %
and from 10,8 % to 12,3 % respectively. The
evolution of Taiwanese imports indicates that their
market share in terms of volume is linked to the
degree of decrease in their average prices indicated
below.
in 1995, when import prices
decreased by 8 %, the market share of the imports
in terms of volume increased by 6 %. In 1996,
when import prices decreased by 9 %, as compared
to 1995,
the market share increased by 30 %.
During the investigation period, when import
prices decreased by another 2 %, as compared to
1996, the market share of the imports increased by
14 %.

Indeed,

1. Consumption in the Community

(49)

For the purpose of the present investigation, total
consumption in the Community was established
on the basis of the total sales made by complainant
and non-complainant Community producers and
assemblers of bicycles in the Community market
and total imports of bicycles into the Community.

From 1994 to the investigation period consump-
tion in the Community decreased by 16 % in
terms of volume and by 11 % in terms of value.

(b) Average import price of bicycles from Taiwan

(53) On the basis of Eurostat information available, the
development of the average import price for all
Taiwanese imports from 1994 to the investigation
period indicates a significant decrease of 19 % at
the end of the investigation period. This import
price decrease has been confirmed by the detailed
analysis of the sampled Taiwanese companies’ sales
prices over this time period.

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received from the

Based on the replies to the Commission’s question-
naire
sampled Taiwanese
exporting producers, from 1995 up to the invest-
igation period the average sales prices for bicycles
sold to independent customers decreased by 13 %
confirming the negative trend in import prices
during the whole period under examination.

(c) Price undercutting

(56) On this basis, around 100 different models rep-
resenting around 600 000 units
sold in the
Community market, namely over 60 % of the sales
made by the sampled Taiwanese exporters, could
be directly compared with Community produced
bicycles. In order to evaluate any possible price
undercutting, prices of comparable bicycles were
compared under
sales conditions. Any
differences in sales conditions or levels of trade
having a direct impact on price comparison were
considered and where necessary Taiwanese ex-
porters’
sales prices were adjusted accordingly,
based on the evidence available.

similar

(54)

The investigation has shown that sales of Tai-
wanese bicycles in the Community market were
made:

(57)

(cid:190) either directly to unrelated customers (distribu-
tors, wholesalers, department stores, etc.), or

(cid:190) indirectly via related sales companies which
subsequently
same kind of
sold to the
customers including retailers.

Sales were made both of branded and non-branded
products. In the latter case, American or European
brand names were given to bicycles made in
Taiwan.

The investigation has shown that similar types of
sales to similar types of customers were also made
by the sampled Community producers, namely
stores and
distributors, wholesalers, department
retailers.

(58)

to

both

questionnaires

(55) As far as the product under investigation itself is
concerned, detailed specifications were requested in
the
sampled
sent
Community producers and sampled Taiwanese
exporters. On the basis of such information, the
Commission was in a position to identify the
similar or comparable models produced and sold
by both Community and Taiwanese producers in
the Community market and thus carried out the
price comparison exercice on a model by model
basis.

The information collected during the investigation
confirmed that when the main features of a bicycle
are of a similar aspect and/or of comparable
quality, the possible variations in the other minor
features are not such as to substantially differentiate
between one bicycle and another. The main
features are considered to be the frame and fork,
the gearing system, namely including the front and
rear derailleur, the freewheel and the number of
sprockets, and the braking system.

price

period
as

The price comparison showed that for the invest-
undercutting margins,
igation
the
expressed
relative
range from
Community industry’s
11,6 % to 28,7 % depending on the sampled
Taiwanese exporter and were found to be 15 % on
average.

sales price,

percentage

of

a

3. Situation of the Community industry

(a) Production

From 1994 up to the
investigation period,
Community industry production decreased by
20 %. That poor performance indicates that this
industry was facing difficulties during the period
under examination. The investigation has revealed
that the decrease in production was the result of
several bankruptcies and company closures in the
Community due to the prevailing difficult situation
in the market. Several Community producers, in
order to survive, switched from the complete cycle
of production into assembling or sub-assembling
importing the main bicycles parts
operations,
(frame, fork, handle bars etc.) from countries such
as Taiwan, China, India.

(59) Analysis of the production figures showed that in
1994 production of category A bicycles, i.e. MTBs,
was the main production segment and accounted
for 45,8 % of total Community production. During
the investigation period a switch occurred. Produc-
tion in category B (trekking, city, hybrid bicycles)
increased and became the most important segment
of production of the Community industry. Between
1994 up to the investigation period, the loss in
production mainly occurred in category A where
the decrease was over 1,5 million units. Production
in children’s bicycles also decreased but the share
in the mix of production did not change much.

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(b) Capacity and capacity utilisation of

the

Community industry

(60) As far as production is concerned,

the bicycle
activity in Europe can be considered as a seasonal
activity. Basically, in most of the Member States the
season starts in March and finishes in September
each year. Bicycle collections for the next season
are presented in September to the business profes-
sionals (dealers, agents, retailers etc.). This implies
that production is very intensive during certain
months of the year (January to March), capacity
utilisation peaks at around 85 %, and in other
months (June, July and December) capacity is
below 40 %. Even though the shifts are extended
and temporary personnel may be employed, the
Community producers’ require a high capacity as it
should be sufficient enough to meet the demand
during the peak months. This explains, to a certain
extent, why the average rate of capacity utilisation
is rather low.

(61)

From 1994 to the investigation period, due to the
same reasons as those responsible for the decrease
in production as well as the restructuring under-
taken by
the
Community industry’s capacity was significantly
reduced by 18 %.

certain Community producers,

(62) Nowadays there are three major groups in the
Community market holding around 28 % of the
whole Community-wide market share (1). However,
contrary to the allegation made by some Taiwanese
exporters and some importers, this does not consti-
tute a risk of a monopolistic situation being created
in the Community market. Indeed, there is a large
number of independent producers.

(63) Despite the cut in capacity of 18 %, the capacity
utilisation rate was 58 % in 1994 and decreased by
3 % during the entire period under examination
indicating a reduced level of activity by the
Community industry. Taking into account
the
actual situation of the bicycle business in Europe, it
is considered that a rate of utilisation of around
70 % would be necessary in this type of industry to
produce positive effects in costs and profitability.

(c) Stocks

(64)

In 1994, the volume in stocks represented between
six to nine weeks’ delivery whereas it only rep-
resented four to seven weeks during the invest-
igation period. Several factors such as the restruc-
turing of
the production activities operated by
certain Community producers and the necessity to
change the marketing strategy for meeting the
requirements of the market while limiting the risks

(1) These groups are Cycleurope, Derby and Atag.

in production, can explain this trend. On the other
hand, the fact that the bicycle business is a seasonal
activity in the Community implies that a certain
level of stocks should always be kept available in
order to meet the expected or unexpected require-
ments of the market. The investigation has shown
that the need for stock has changed over the last
few years. The bicycle market has become more
fashion-driven and customers do not order large
quantities in advance. This mainly explains why
stocks could decrease.

(d) Sales in the Community market

(65)

unrelated

From 1994 to the investigation period,
sales
volume made by the Community industry in the
customers
to
Community market
decreased by 22 % (around 1,4 million units). As in
production, the decreases occurred in category A
(MTB) and C (children’s bicycles). MTBs sold to
independent customers decreased from 3,5 million
units in 1994 to 2,1 million during the invest-
igation period. 1,9 million children’s bicycles were
sold in 1994, but only 1,5 million during the
investigation period.

(66)

Sales value decreased by 14 %, namely less than
the decrease in sales volume,
indicating that
average sales prices developed positively. However,
from 1996 to the investigation period, both the
volume and value of sales decreased by 2 %.

(67)

(68)

(69)

(e) Average sales price and price evolution

Between 1994 and the investigation period, the
development
in sales prices was positive. The
increase in average sales prices also reflects a
change in the product mix (see recital 60 above).
Being faced with extensive competition from
dumped imports from Taiwan, especially in the low
and medium segments of the MTB market, the
Community industry concentrated on higher range
products and on certain categories of bicycles.

Indeed, price analyses carried out
in specific
Member States and separately for each category of
bicycle have shown that the trend in sales price was
less
the
United Kingdom, France and Germany, where
most imports came from Taiwan.

favourable in Member States

such as

In addition, the price evolution on a category-per-
category basis for homogeneous models has shown
that average prices decreased from 5 to 15 % in
category A depending on the Member State,
whereas prices developed more favourably for the
categories where imports from Taiwan were more
limited (categories B and D).

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(f) Profitability

4. Conclusion on injury

(70)

(71)

The average return on sales made by the sampled
Community producers for the product concerned
has been negative from 1995 up to the invest-
igation period. From a minor positive result in
1994, profitability has become negative despite the
efforts made by the sampled Community producers
to restructure and reduce costs. In this respect,
production capacity was reduced and people had to
be laid off. The investigation has shown that even
though average sales prices increased sales volume
dropped considerably (–22 %) between 1994 and
the investigation period.

(g) Market share

that

share

shows

trend in market

The
the
Community industry continually lost shares of the
market, in particular to the benefit of Taiwanese
imports. Between 1994 and the investigation
period, the Community industry lost 7 % of the
share of the market measured in volume and 4 %
the market measured in value. In terms of
of
volume the above decrease in market share repres-
ents a loss of over 450 000 units in sales. In 1995,
the market
then
continued to decrease until the end of the invest-
igation period. In terms of value the evolution of
the market share followed the same trend as in
terms of volume.

share increased by 4 % but

(h) Investments

(72) Direct

investments were mainly made in ma-
chinery with the aim of increasing efficiency and
automation in the production process. The invest-
igation has shown that investments in the bicycle
business were very limited (around 2 % of the net
turnover made with unrelated customers in the
Community). Consumption has been decreasing
and the actual capacity of the Community produ-
cers taken alone is large enough to cover 80 % of
the total Community consumption during the
investigation period. There is therefore no need to
invest
in order to increase production capacity
given the situation in the market.

(74)

The imposition of anti-dumping duties on dumped
imported bicycles orginating in China, Malaysia,
Thailand and Indonesia allowed a substantial
decrease
into the
in these dumped imports
Community and restored fair trade conditions in
the market. This should have led to a recovery in
the situation of the Community industry in 1994
and 1996.

(75) Despite these positive effects on the Community
market, from 1994 to the investigation period, the
main injury indicators related to the Community
industry, namely production, capacity and capacity
utilisation, sales in terms of volume and value,
market share, profitability, employment and invest-
ments decreased.

Production decreased by 20 % and capacity utilisa-
tion by 3 % despite reduced production capacity
(–18 %). Sales volume decreased by 22 % and
sales value by 14 %. During that period of time
4 % of the value and 7 % of the volume of the
market were lost. Profitability remained negative
despite restructuring efforts, the level of investment
decreased by 11 % and employment was reduced
by 15 %.

(76)

Indonesia

The analysis within the period under examination
indicated that despite a positive development in
consumption between 1996 and the investigation
period and despite anti-dumping duties imposed
on Malaysia,
the
Community industry’s production decreased by
3 % and sales volume by 2 %. As a result the
additional losses in market share both in volume
(–3 %) and value terms (–2 %) prevented any
improvement of the situation in that industry. Prof-
itability remained negative and financial
losses
added to those already made in the past.

and Thailand,

(77)

In view of the negative developments of the above
injury indicators during the whole period under
examination, it is considered that this industry has
injury within the meaning of
suffered material
Article 3 of the Basic Regulation.

H. CAUSATION

1. Introduction

(i) Employment

(73)

The number of personnel employed decreased by
15 %. Over 2 400 people were laid off during the
whole period under examination.

(78)

In order to reach its conclusions on the cause of
the injury suffered by the Community industry, the
Commission examined the impact of other known
factors and their consequences on the situation in
that industry. Such analysis ensures that any injury
caused by these latter factors is not attributed to the
dumped imports.

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26. 8. 98

Other known factors such as the development of
consumption, the other imports of bicycles into the
Community, competition from other Community
producers in the market and the export perform-
the Community industry, are analysed
ances of
below.

2. Dumped imports from Taiwan

(83)

the

bicycles

(79) Available information has shown that imports of
Community,
into
Taiwanese
throughout the period, were very high. In 1994
over 2 million units, namely over 39 % of total
imports, were imported from Taiwan. At the end of
the investigation period, after the considerable drop
in imports from other countries, Taiwan became
the major importer, covering 55 % of all imports
into the Community. In actual terms, from 1994
up to the end of the investigation period, imports
of bicycles from Taiwan increased by 25 % in
terms of volume and by 1 % in terms of value. The
average sales prices of Taiwanese bicycles in the
Community market decreased on average by 19 %.
As a consequence of the above, during that period
of time the market share held by Taiwanese ex-
porters increased by 50 % in terms of volume and
by 14 % in terms of value.

Community market. From 1994 to the invest-
igation period, it was found that prices charged by
Taiwanese exporters in the Community market had
decreased by 19 %. In these circumstances the
mere presence of the high volume of dumped low-
priced bicycles imported from Taiwan must have
had a significant impact on that market.

The analysis of the Community industry’s price
evolution also showed that average sales prices of
mountain bicycles decreased by 12 % in those
Community Member States where imports of
Taiwanese bicycles were concentrated, namely the
United Kingdom, France and Germany. On the
other hand, price evolution in categories B and D,
where imports from Taiwan were limited to 13 %
and 4 % respectively, were less negative. Despite
the above finding on the reduction of prices by the
Community industry, imports from Taiwan were
still found to significantly undercut sales prices of
the Community industry. As shown in recital 57,
undercutting margins were calculated at a level
ranging from 11,6 % to 28,7 %.

3. Impact of other factors

(a) Development of consumption

(80) At the same time, as indicated above, an overall
worsening of the situation of the Community was
in production
found with major
(–20 %),
value
(–14 %), resulting in a negative profitability since
1995.

(–22 %),

decreases

volume

sales

sales

(81)

(82)

In order to further show the causal link between
low-priced, dumped
the increasing volume of
Taiwanese imports and the deterioration of
the
situation of the Community industry, an analysis
within the various categories of bicycles has been
made. This analysis has shown that the major loss
in the Community industry’s production volume
occurred
segment
in the mountain bicycle
(category A). This segment constitutes about 60 %
of total imports from Taiwan. From 1994 to the
investigation period, the investigation has shown
that the Community industry had to cut its moun-
tain bicycle production by 38 %, representing a
loss in sales of 1,4 million units largely covered by
Taiwanese imports.

In addition, it was also established that bicycles
imported from Taiwan and those produced in the
Community are like products, offered through
similar sales channels in the Community market.
Furthermore, the market is transparent and the low
prices offered for Taiwanese bicycles are well
in the
known to

bicycle professionals

all

(84)

From 1994 to the investigation period, consump-
tion in the Community market decreased by 16 %
in volume terms and by 11 % in value terms in-
dicating a downturn in the bicycle business. An
the volume of
analysis of
consumption indicates
the main decrease
(–17 %) occurred between 1994 and 1996 and that
the trend became positive between 1996 and the
investigation period (+1 %).

the development of

that

(85) During the time period, Community industry’s
sales volume decreased by 20 % and sales value by
12 %, namely more than the actual decrease in
consumption, which was translated into a loss of
market share. Overall, although sales prices devel-
oped positively, sales prices of mountain bicycles
(MTBs), which is
the main type of bicycles
imported from Taiwan, decreased significantly in
the Member States where Taiwanese imports are
mainly present.

(86)

From 1996 up to the investigation period,
the
volume of imports from Taiwan increased again by
12 %, but relative value increased only by 7 %.
Sales prices further decreased by 2 % and the
share increased by 14 % in terms of
market
volume and 9 % in terms of value. The above
performances were thus reached when the volume
of consumption increased only slightly.

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(b) Imports of bicycles from countries other than

Taiwan

(87)

(88)

Total imports of bicycles into the Community from
countries other than Taiwan decreased by 32 % in
terms of volume and by 20 % in terms of value.
The number of bicycles
imported into the
Community decreased by over 1 million units. The
fact that the decrease in volume is higher than that
in value indicates that the trend in average sales
prices was largely positive during the period under
examination.

The main decrease in these imports took place in
the years 1995 and 1996 following the negative
development in consumption. The share lost by
these countries is however higher than the decrease
in consumption. Import volumes and value recov-
ered somewhat between 1996 and the investigation
period following the positive trend in consumption
at that particular period of time.

(89) During the period under examination,

imports
from countries
to anti-dumping duties
(China, Indonesia, Malaysia and Thailand) signi-
ficantly decreased and imports from China prac-
tically disappeared.

subject

(90) After the major decrease in dumped imports from
China, Malaysia, Indonesia, and Thailand during
the period under examination, Poland, the Czech
Republic, India and the USA became the major
exporters of bicycles to the Community. Imports
from these countries cover around 25 % of all the
other imports into the Community or 70 % of
imports when excluding those from Taiwan. The
fact that imports from these countries increased by
77 000 units during the whole period under exam-
ination, whereas imports from Taiwan increased by
over 545 000 units indicates that the impact of the
these imports was very limited as
volume of
compared to the impact of Taiwan. Moreover, an
analysis of
in the indicative
import price of these imports reveals that they did
not add weight to the pressure exerted on prices in
the Community, the information available showing
an average price increase.

the development

(c) Other producers in the Community

(91)

(92)

In 1996, other producers in the Community rep-
resented around 40 % of total Community produc-
tion. Even though they did not expressly support
the complaint, none of them expressly opposed it.

From 1994 to the investigation period, these non-
complaining producers lost 16 % of production,
14 % of sales volume and 6 % of sales value.
Although their market share increased by 2 % in

terms of volume and 5 % in terms of value during
that period, they did however incur net losses in
sales volume (– 695 000 units) and in production
(– 837 000 units). This demonstrates that
they
were also suffering injury and were facing difficul-
ties similar to those of the Community industry.

(93)

injury

Some exporters and importers of dumped Tai-
in the
claimed that
wanese bicycles
Community is to a substantial extent caused by the
behaviour of non-participating Italian producers
present in the major Community Member States. It
was stated that these producers’ prices were very
low and that they were undercutting prices in the
Community market.

(94) Again,

the Commission was not provided with
conclusive evidence that the behaviour of some
producers in the Community might have been
such as to injure the rest of the industry. It was
therefore not possible to assess the impact of any
on the Community
such alleged behaviour
industry. Furthermore,
the available information
indicates that between 1994 and 1996, production
in Italy decreased by over 1,6 million units. This
decrease represents over 60 % of the total loss in
production incurred by all the producers in the
Community during the whole period under exam-
ination.

(95)

it appears

Rather than causing injury to the Community
industry,
Italian producers not
that
supporting the complaint themselves have suffered
injury during the period under examination. The
allegation made by the above parties is therefore
rejected.

(d) Export activity and other activities of

the

Community industry

(96)

Exports to third countries have always represented
a minor activity for the Community industry. From
1994 up to the investigation period, they repres-
ented around 2 % of
total sales with a minor
decrease toward the end of this period. The general
downturn in the bicycle business, combined with
the fact that the main European exporting com-
panies are more and more supplying the export
markets with local production can explain to a
certain extent
from the
Community industry. The minor decrease in
export sales, however, can certainly not justify or
explain the material
the
Community industry. In any event the negative
development of the injury indicators sales, sales

the drop in exports

suffered by

injury

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Official Journal of the European Communities

26. 8. 98

prices, market share and profitability cannot be
explained by any change in the export activity of
the Community industry, as these indicators were
all established for the activity of the Community
industry in the Community alone.

I. COMMUNITY INTEREST

1. Preliminary remarks

(97) Operators in the Community market claimed that
the other business activities of some complainant
Community producers, have been extremely diffi-
cult over the last few years, one particular company
having lost 50 % of
its export business. This
resulted in high losses and therefore in injury,
which cannot be attributed to Taiwanese exports.

(98) As far as this claim is concerned, it should first be
recalled that there are only a limited number of
Community producers having a substantial activity
other than producing and selling bicycles. Two of
them are included in the sample of Community
producers. The above situation concerns only one
Community producer in particular.

(99)

(100)

In an anti-dumping investigation, the Commission
exclusively analyses injury indicators referring to
the activity related to the product concerned in the
Community. As a result, the possible impact of
items generated by another activity, not related or
linked to the product concerned, are systematically
excluded from the findings of the investigation. It
follows that the findings leading to the conclusion
that
suffering
material injury relate only to the bicycle activity
and that therefore the above claim is irrelevant.

the Community

industry was

4. Conclusion on causation

factors other

than
It cannot be excluded that
dumped imports from Taiwan,
in particular the
decrease in consumption, contributed to the diffi-
cult state of the Community industry. However, the
substantial increase in import volume from Taiwan,
the increase in market share,
the considerable
degree of price decreases and price undercutting by
these imports had material negative consequences
on the situation of the Community industry at a
time when a positive development could be
expected after
the imposition of anti-dumping
measures on imports from China as well as Indo-
nesia, Malaysia and Thailand.
therefore
concluded that these imports, taken in isolation,
have caused material
injury to the Community
industry and injury caused by other factors was not
such as to break this causal link.

It was

(101) The purpose of anti-dumping measures

to
remedy dumped imports having an injurious effect
on a Community industry. This should result in
the re-establishment of a situation of effective
competition on the Community market.

is

Having reached a positive conclusion on dumping,
injury and the cause of this injury, the Commission
examined whether any compelling reasons existed
which would have led to the conclusion that it is
not in the Community interest to impose measures
in this particular case. For
this purpose, and
pursuant to Article 21(1) of the Basic Regulation,
the impact of possible measures on all parties
and
proceeding
involved
the
also
taking measures
taking or not
consequences of
were considered on the basis of the evidence avail-
able at the provisional stage.

in the

(102)

It should also be recalled that in the anti-dumping
proceedings concerning imports of bicycles origin-
ating in China, and in Malaysia, Indonesia and
Thailand, under similar conditions, it was consid-
ered to be in the interest of the Community to
impose anti-dumping measures.

2. Interest of the Community industry and

related activity

(103)

In general, the interest of an industry is that ef-
fective competitive conditions are restored and that
prices reflecting fair trading conditions are quoted
in the market. Since 1988, Community bicycle
manufacturers, mostly made up of
small and
medium-sized enterprises, are facing competition
from dumped imports. This has led to a serious
degree of vulnerability in the industry, as a result of
which rationalisation and restructuring efforts are
still going on today demonstrating the industry’s
adaptability, competitiveness and viability.

in force and an
(104) With anti-dumping measures
in consumption,
expected positive development
employment, which decreased by over 2 400
people during the whole period under exmination,
would also be preserved. With an average anti-
dumping duty of 6,5 % imposed on bicycles
imported from Taiwan, the Community industry
could complete its restructuring and recover finan-
cially, thus benefiting from the re-establishing of
effective competition in the market.

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(105)

In view of the material injury suffered over the last
few years, it is highly probable that, in the absence
of any measures to correct the negative effects of
dumped imports from Taiwan, its precarious finan-
cial situation will deteriorate further. This may ulti-
mately lead to further company bankruptcies or
closures in the market and therefore jeopardise
thousands of other jobs all over the Community.
The above negative consequences for the bicycle
industry would be amplified due to repercussions
in the European parts industry and other activities
linked to the bicycle business.

3. Interest of importers in the Community

(106) On the basis of the information received from the
administrations in Member States, a considerable
number of importers are importing bicycles into
the Community but it has not been possible to
identify how many were directly concerned by this
proceeding.

(107)

taking measures,

In order to evaluate the impact on importers of
taking measures or not
the
Commission sent questionnaires to the known
importers in the Community. A sample of im-
porters may be selected after the publication of the
provisional findings and on-the-spot investigations
may take place in order to verify the information
submitted.

(108) Some importers not known to the Commission
made themselves known within the time limit,
requested a questionnaire and submitted a reply.
Certain importers also submitted written comments
on the proceeding. Out of the 64 importers who
replied to the Commission’s questionnaire or
submitted information to the Commission only six
replies were considered to be meaningful in order
to assess the impact of anti-dumping measures on
their activities.

(109) They commented on the dynamic effect of the
innovation stemming from Taiwanese exporting
producers on the Community market and on the
negative effects of anti-dumping measures on their
business in general, on employment and on the
final choice of consumers.

(110) The imposition of anti-dumping measures will not
put importers of Taiwanese bicycles in a disadvan-
tageous position as compared to other importers of
bicycles in the Community. It will simply correct
the distorting effects of
injurious dumping and
restore fair trade competition conditions among all
the operators in the Community.

could

(111) On the basis of the meaningful information made
available by some importers, it is considered that
an average anti-dumping duty of 6,5 % on bicycles
imported from Taiwan may cause an increase of
around 3,3 % in the overall cost of sales of the
importers. This extra cost, or at least part of this
cost,
subsequent
purchasers, namely wholesalers or retailers already
enjoying relatively high profit margins on the
in the
resale
Community. The Commission therefore considers
that the level of the measures proposed is not such
as to prevent importers from importing Taiwanese
bicycles
these bicycles will always be
present in the Community market.

of Taiwanese

bicycles

charged

so that

price

the

be

to

(112) Based on the foregoing, it is considered that any
negative effects on importers of taking measures
against imports from Taiwan cannot outweigh the
positive effects of taking measures for the other
operators in the Community.

4. Interest of consumers

(113) The Commission

comments

from
received
consumers’ associations in the Community indi-
cating these associations’ concerns that sales prices
of Taiwanese bicycles may increase as a result of
the imposition of anti-dumping measures. A claim
was also made as to the need for consumers to
preserve a wide choice when buying a bicycle.

(114) As has already been mentioned above, the level of
the measures proposed is not such as to foreclose
the Community market to Taiwanese bicycles and
the consumer’s choice will always be preserved. In
addition, as far as a possible sales price increase is
concerned, it should be mentioned that Taiwanese
bicycles are not imported directly by consumers.
Bicycles pass through one or more levels of trade
before they are offered to the public. The import
price on which anti-dumping duties will be levied
represents on average 40 % of the total resale price
the bicycle. Considering an average anti-
of
dumping duty of 6,5 % on imports of bicycles
from Taiwan, the direct impact, if any, of the duties
on the resale price to the consumer is already
limited to 2,6 %.

trade

(115) However, it should be borne in mind that with
effective
the
Community market, competition will continue to
have beneficial effects for the consumer as far as
the price level is concerned. Moreover, given the
high number of competitors in the market, it is

conditions

restored

in

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Official Journal of the European Communities

26. 8. 98

importers, wholesalers,

considered that price increases, if any, should not
be automatic. They should depend on competition
and consumer behaviour. It is considered likely
that
retailers and other
selling Taiwanese bicycles may also
operators
decide, if justified, to decrease their relative profit
margins so that no price increase will occur in the
resale price of Taiwanese bicycles to consumers.

J. PROVISIONAL DUTY

(121)

In order to prevent further injury being caused by
the dumped imports concerned before the end of
the investigation, provisional anti-dumping meas-
ures should be adopted. These measures should
take the form of a provisional anti-dumping duty.
Given the wide variety of bicycles exported from
Taiwan, an ad valorem duty was considered the
most appropriate form of measure.

5. Consequences on competition in the

Community market

(116) Some parties claimed that anti-dumping measures
may encourage the creation of a monopolistic
situation, in the Community market as big groups
such as Derby, Cycleurope and Atag, increased in
size by purchasing smaller companies.

(122)

(117) There is a high number of producers in exporting
countries such as USA, Turkey, Poland, the Czech
Republic,
India and Taiwan exporting to the
Community and there is a large number of opera-
tors and a large number of producers in the
Community. Therefore, there is no risk of creating
a monopolistic situation in the bicycle market.

For the purpose of establishing the level of the
provisional duty, account was taken of the level of
dumping found and the amount of duty necessary
to eliminate the injury suffered by the Community
industry.

It was considered that the amount of duty neces-
sary to remove the effects of injurious dumping
should allow the Community industry to cover its
costs of production and obtain a reasonable profit
on sales. In this respect it was found that a profit
margin of 8 % on turnover could be considered to
be an appropriate basis, regard being given to the
need for long-term investments allowing a contin-
uous product development, etc. It was also consid-
ered that the Community industry could reason-
ably expect such a rate of return in the absence of
injurious dumping.

(118) Moreover, the level of the measures proposed is not
such as, from an economic point of view, to fore-
close the Community market
to the Taiwanese
exporting producers and therefore it will ensure the
continued presence of their products in the market.
Measures,
effective
competition conditions for all the operators in the
market be restored and that this would stimulate
the presence of competitive forces in the market.

therefore,

ensure

that

6. Conclusion on the Community interest

(119) Having examined the various interests involved in
the present proceeding, no compelling reasons
were found to exist not to impose anti-dumping
measures. On the contrary, the imposition of anti-
dumping measures is necessary to prevent further
aggravation of the injury already suffered by the
Community industry and to preserve employment
in the business.

(120) The Commission also considers that the imposi-
tion of provisional measures in the present case
will re-establish effective competition conditions
for all operators in the Community. Consumers’
choice will not be unduly affected and they will
continue to enjoy the presence of a high number of
competitors in the market preventing any unjusti-
fied increase in the resale prices.

(123) Accordingly, injury margins were determined on a
model-by-model basis as the difference between
the cost of production of the Community industry,
increased by the abovementioned profit margin on
the one hand, and the actual net sales price of the
comparable imported models used for the under-
cutting calculation on the other hand. This differ-
ence was then expressed as a percentage of the cif
import price at the Community frontier customs
duty unpaid.

(124) Since for all exporting producers in the sample the
dumping margin has been found to be lower than
the injury margin,
the provisional duty to be
imposed should correspond to the dumping
margin established, in conformity with Article 7(2)
of the Basis Regulation.

(125) The provisional anti-dumping duty for companies
which cooperated in the investigation but were not
included in the sample equals the average dumping
margin for the sample, weighted on the basis of
export volume to the Community. This was lower
than the amount of duty necessary to eliminate the
injury in all cases. The provisional anti-dumping
duty for non-cooperating companies is based on
the dumping margin calculated for those com-
panies as explained in recital 42 because the
amount of duty necessary to eliminate the injury
exceeded in all cases the dumping margin estab-
lished.

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L 238/25

K. FINAL PROVISIONS

(126)

In the interest of sound administration, a period
should be fixed in which the parties concerned
should make known their views in writing and
request a hearing. Furthermore, it should be stated
that all findings made for the purpose of this Regu-
lation are provisional and may have to be reconsid-
ered for the purpose of any definitive duty which
the Commission may propose.

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is hereby imposed
on importers of bicycles and other cycles (including
delivery tricycles), not motorised, with or without ball
bearings, falling within CN codes 8712 00 10, 8712 00 30
and 8712 00 80, originating in Taiwan.

The rate of

the provisional anti-dumping duty
2.
applicable to the net, free-at-Community-frontier price,
before duty, shall, subject
to paragraphs 3 and 4, be
18,2 % (TARIC additional code 8900).

3.
Products manufactured and sold for export by the
exporting producers listed in the Annex shall be subject
to a provisional anti-dumping duty rate of 5,4 % (TARIC
additional code 8548).

4.
Products manufactured and sold for export by the
companies listed below shall be subject to the following
provisional anti-dumping duty rates.

Manufacturer

Rate of duty

Fritz Jou Manufacturing Co., Ltd

10,2 %

Giant Manufacturing Co., Ltd

Merida Industry Co., Ltd

Ming Cycle Industrial Co., Ltd

2,4 %

2,5 %

2,5 %

Overlord Industries Corp.

18,2 %

TARIC
additional
code

8698

8699

8700

8701

8702

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

6.
The release for free circulation in the Community of
the product referred to in paragraph 1 shall be subject to
the provision of a security, equivalent to the amount of
the provisional duty.

Article 2

Pursuant to Article 20(1) of Regulation (EC) No 384/96,
the parties concerned may make their views known in
writing and apply to be heard orally by the Commission
within 15 days of the date of entry into force of this
Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96,
the parties concerned may comment on the application of
this Regulation within one month of the date of its entry
into force.

Article 3

This Regulation shall enter into force on the day of its
publication in the Official Journal of the European
Communities.

Article 1 of this Regulation shall apply for a period of six
months.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Brussels, 25 August 1998.

For the Commission

Leon BRITTAN

Vice-President

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26. 8. 98

ANNEX

Acetrikes Industrial Co., Ltd, Changhua

Asahi Enterprises Corporation, Taipei

Century Manufacturing Co., Ltd, Taichung

Dahon Inc., Taipei

Dodsun Bicycle & Machinery Manufacturers, Tao Yuan

Fairly Bike Manufacturing Co., Ltd, Taipei

Formosan I Shin Enterprise Ltd, Tainan

Golden Cycle Corp., Taipei

Ideal Bike Corporation, Taichung

Kenstone Metal Co., Ltd, Taichung

Liyang Industrial Co., Ltd, Taipei

MT Racing Inc., Taichung

Pretty Wheel Industrial Co., Ltd, Taichung

Rockman Taiwan Bicycle Mfg. Inc., Taichung

San Ground Co., Ltd, Taichung

Sanfa Bicycle Industrial Co., Ltd, Taichung

Sheng Fa Industries Co., Ltd, Taipei

Southern Cross International Co., Ltd, Nantou

Speedstar Industries Co., Ltd, Kaohsiung

Taioku Manufacturing Co., Ltd, Nantou

Taiwan Hodaka Industrial Co., Ltd, Taipei

United Engineering Corp., Taoyuan

Wai I Industry Co., Ltd, Chia-Yi

Wheeler Industrial Co., Ltd, Taichung

Willing Industry Co., Ltd, Taichung

Yuh Jiun Industrial Co., Ltd, Tainan.