Council Regulation (EC) No 397/1999 of 22 February 1999 imposing a definitive anti-dumping duty on imports of bicycles originating in Taiwan and collecting definitively the provisional duty imposed
Date: 1999-02-22
Institutions: Council of the European Union
Subjects: Taiwan, anti-dumping duty, import, originating product, two-wheeled vehicle

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 397/1999

of 22 February 1999

imposing a definitive anti-dumping duty on imports of bicycles originating in
Taiwan and collecting definitively the provisional duty imposed

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries
the European
not members
Community (1) and in particular Article 9(4) thereof,

of

Having regard to the proposal submitted by the Commis-
sion after consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

(5)

A. PROVISIONAL MEASURES

By Commission Regulation (EC) No 1833/98 (2)
(hereinafter referred to as ‘the Provisional Duty
Regulation'), provisional anti-dumping duties were
into the Community of
imposed on imports
bicycles
falling within CN code 8712 00 10,
8712 00 30, 8712 00 80 and originating in Taiwan.

B. SUBSEQUENT PROCEDURE

Following the imposition of provisional anti-
dumping
parties
several
duties,
submitted comments in writing.

interested

The parties who so requested were granted an
opportunity to be heard by the Commission.

The Commission continued to seek and verify all
the information it deemed necessary for
the
purpose of its definitive findings. A verification
visit was carried out at
the
following importer not related to any Taiwanese
exporting producer and located in the Community:

the premises of

— Bikeurope BV, Utrecht, The Netherlands.

All parties were informed of the essential facts and
considerations on the basis of which it was
intended to recommend the imposition of defini-

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as last amended by
Regulation (EC) No 905/98 (OJ L 128, 30. 4. 1998, p. 18).

(2) OJ L 238, 26. 8. 1998, p. 10.

(6)

(7)

(8)

tive anti-dumping duties and the definitive collec-
tion of amounts secured by way of provisional
duties. They were also granted a period within
which to make representations subsequent to this
disclosure.

The oral and written comments submitted by the
parties were considered, and, where deemed appro-
priate, the definitive findings have been changed
accordingly.

C. PRODUCT

CONCERNED
PRODUCT

AND

LIKE

Since no comments with regard to the definition of
the product concerned and the like product were
received, the contents of recitals 13 to 19 of the
Provisional Duty Regulation are hereby confirmed.

D. NEW EXPORTING PRODUCERS IN TAIWAN

As explained in the Provisional Duty Regulation, in
view of the large number of exporting producers in
Taiwan,
apply
the Commission decided
sampling techniques in accordance with Article 17
of Regulation (EC) No 384/96 (hereafter referred to
as ‘the Basic Regulation'). No arguments have been
advanced concerning the selection of the sample of
exporting producers which was made with the
consent of the association representing them.

to

One month before the adoption of provisional
measures, a number of exporting producers in
Taiwan made themselves known and requested
new exporting producer status. Following the adop-
tion of provisional measures the Commission, by
examined
means of
whether
the
product concerned to the Community during the

special questionnaire,
these companies did not export

a

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investigation period, whether they had started to
to the Community after this period or
export
whether
they had entered into an irrevocable
contractual obligation to export a significant quan-
tity to the Community, and whether they were not
related to any of the exporters or producers in
Taiwan which are subject
to the anti-dumping
measures on the product concerned. The exporting
producers which have shown that they fulfil the
abovementioned criteria were considered as new
exporting producers and should be granted the
same treatment, in terms of definitive measures, as
the cooperating exporting producers not included
in the sample, i.e. an anti-dumping duty calculated
in accordance with Article 9(6) of the Basic Regula-
tion.

(9)

The same treatment should be granted to any other
new exporting producer who, following the adop-
tion of definitive measures,
sufficient
evidence showing that
fulfils the abovemen-
tioned criteria.

submits

it

E. DUMPING

1. Normal value

1. Methodology for the construction of normal

value

(10) As no arguments have been advanced concerning
the methodology used for the determination of
constructed normal value following the adoption of
provisional measures, the findings as set out in
recitals 27 to 31 of the Provisional Duty Regulation
are hereby confirmed.

2. Cost of production

(11)

Following the adoption of provisional measures,
one company contested the use of the manufac-
turing cost as set out in its own accounting records
for the determination of constructed normal value.
It claimed that the manufacturing cost reported in
its response to the questionnaire should be used
instead because this was more accurate. It also
claimed that since certain customs duties incurred
for the product when sold domestically were al-
located together with the manufacturing overheads
on all products in its accounting records, a different
allocation should be made for the dumping calcu-
lations.

(12) During the on-the-spot investigation it was found
that the company’s accounting records provided a
much more detailed cost of manufacturing per
model than that requested in the questionnaire.
The investigation also revealed that there was a

significant discrepancy between the manufacturing
cost reported in the response to the questionnaire
in the company’s accounting records.
and that
Overall,
company underestimated in its
the
response to the questionnaire the manufacturing
cost of the models exported to the Community and
overestimated the manufacturing cost of
the
domestic models.

The company did not provide any reason why the
cost reported in the response to the questionnaire
reflected more reasonably the cost associated with
the production of the product than the cost in its
accounting records. With regard to the allocation of
certain customs duties together with the manufac-
turing overheads, the company was not able to
explain, on the basis of information available from
the reply to the Commission’s questionnaire and
the on-the-spot investigation, how those customs
duties were treated in its accounts and how they
were allocated to the different models. Therefore it
was concluded that the per model manufacturing
cost obtained from the company’s accounting
records should be used for the construction of
normal value.

(13) Another company claimed that

items,

in constructing
normal value the Commission should not have
rejected the allocation of direct labour and manu-
facturing overheads made in the questionnaire
response. It argued that since it had no precise
allocation method for these cost
it was
compelled to create such an allocation method for
the dumping investigation. However, the investiga-
tion revealed that the company had historically
utilised an allocation method for direct labour and
manufacturing overheads. It was also found that the
ad hoc allocation used in the questionnaire
response systematically raised the cost of high
manufacturing cost models and reduced the cost of
low manufacturing cost models as compared to the
cost allocation historically utilised in its accounting
ad hoc allocation
records. According to this
method, direct labour and manufacturing overheads
were allocated on the basis of various factors, e.g.
the size or
the
company did not show that these ad hoc allocation
factors provided a more appropriate allocation of
direct
labour and manufacturing overheads as
compared to the historically used allocation. It was
therefore considered that
there is no reason to
deviate from the allocation method historically
utilised by the company and that the latter method
should be used in calculating the manufacturing
cost for the construction of normal value.

type of parts used. However,

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2. Export price

(14)

no

have

arguments

Since
advanced
concerning the determination of export price
following the adoption of provisional measures, the
findings as set out in the Provisional Duty Regula-
tion are hereby confirmed.

been

3. Comparison

(15) One exporting producer claimed that certain
payments made to a related company in order to
prevent it from becoming insolvent were wrongly
deducted as commissions from the export price.

(16)

investigation revealed that

The on-the-spot
the
exporting producer in question had actually paid
certain commissions directly linked to specific
export sales to the Community which have not
been reported in the response to the questionnaire.
In addition, it should be noted that the exporting
producer had not disclosed in the response to the
questionnaire the existence of the related company
which received the commissions and was involved
in export sales to the Community although such
information was explicitly requested in the ques-
tionnaire. Consequently, the claim was rejected and
these commissions were deducted from the rel-
evant export prices.

(17) No

have

other

arguments

advanced
concerning the adjustments made to ensure a fair
in the Provisional Duty
comparison as set out
Regulation and the findings as set out in the Provi-
sional Duty Regulation are therefore confirmed.

been

4. Dumping margins

1. Methodology

(18) As explained in the Provisional Duty Regulation,
the weighted average constructed normal value by
model was compared on an ex factory basis with
the weighted average export price by model. Since
no change was made to the dumping calculations,
the provisional dumping margins
are hereby
confirmed as follows.

2. Dumping margins for companies in the sample

(19)

The comparison of
the normal value and the
export price duly adjusted showed the existence of

dumping in respect of all companies which were
included in the sample. The dumping margins of
the various models established vary and, therefore,
the Commission calculated a weighted average
dumping margin for each exporting producer. In
view of the significant differences in export prices
of the various models, the weighting was done on
the basis of their export quantity. The definitive
dumping margins expressed as a percentage of the
cif import prices at the Community frontier duty
unpaid are the following:

— Fritz Jou Manufacturing Co. Ltd:

10,2 %

— Giant Manufacturing Co. Ltd:

— Merida Industry Co. Ltd:

— Ming Cycle Ind. Co. Ltd:

2,4 %

2,5 %

2,5 %

— Overlord Industries Corp.:

18,2 %.

3. Dumping margin for cooperating companies

not in the sample

(20) Cooperating companies not selected in the sample
were, in accordance with Article 9(6) of the Basic
Regulation, attributed the average dumping margin
of the companies in the sample, weighted on the
basis of their export volume to the Community.
Expressed as a percentage of the cif import price at
the Community frontier duty unpaid, this defini-
tive dumping margin is 5,4 %.

4. Dumping margin for non-cooperating com-

panies

(21)

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 cooperation was high it is
considered appropriate to set the dumping margin
for non-cooperating companies 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 encourage circumvention
to assume that the dumping margin attributable to
non-cooperating exporting producers is lower than
that found for a cooperating exporting producer.

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

import price
is

cif

at

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F. DEFINITION

OF

THE

COMMUNITY

INDUSTRY, SAMPLING

that some Community producers did not cooperate
satisfactorily in the investigation is unfounded.

(22)

‘EBIA')

The Taiwanese Bicycle Exporters’ Association
(hereafter referred to as ‘TBEA') and the European
Bicycle Importers’ Association (hereafter referred to
as
indicated that only nine European
producers were included in the sample and that six
out of those nine companies are members of larger
groups of bicycle manufacturers. However, only
four of them have cooperated satisfactorily in the
investigation. They remarked that small independ-
ent manufacturers of bicycles had either declined
to support the investigation or had offered little
cooperation. In view of the foregoing, TBEA and
EBIA claimed that the companies sampled for the
injury determinations are not representative of the
Community industry but only represent the inter-
ests of large conglomerates.

(23) As far as representativeness of

the Community
industry or the support from the industry in the
Community are concerned, in accordance with the
provisions of Articles 4(1) and 5(4) of the Basic
it was established at the provisional
Regulation,
stage, as mentioned in recital 43 of the Provisional
Duty Regulation,
that producers representing as
much as 60 % of Community production expressly
supported the complaint and were thus in favour of
the initiation of the present investigation.

No producers, either large or small, expressed any
opposition to the investigation. Consequently,
there cannot be any doubt as to the position of all
the Community producers as regards the initiation
of this investigation.

(24)

In accordance with the provisions of Article 17 of
the Basic Regulation and as set out in recitals 46
the Provisional Duty Regulation the
and 47 of
sample of Community producers chosen was
representative in all respects, covering in particular
a representative variety of company sizes, integra-
tion of production and product mix, as well as a
large volume of production. EBIA and TBEA, in
their above submission, have not shown that the
sample chosen by this methodology is not appro-
priate.

(25)

Finally, it should also be pointed out that all the
Community producers
included in the sample
replied to the Commission’s questionnaire and to
the relevant deficiency letters sent by the Commis-
sion. They also fully cooperated during the on-the-
the allegation
spot

investigations. Consequently,

(26)

Based on the above facts and considerations, the
Council confirms the contents of recital 45 of the
Provisional Duty Regulation as far as representa-
tiveness of the Community industry is concerned.
It is also confirmed that the sample, formed by the
the total
nine companies representing 40 % of
Community industry’s volume of operations,
is
representative of the Community industry.

G. INJURY

1. Methodology for

the determination of

injury

to global

(27) As indicated in recital 48 of the Provisional Duty
Regulation, the injury situation of the Community
industry has been assessed on the basis of two
information. The first category of
categories of
information relates
injury indicators
pertaining to the Community industry, such as,
production, capacity and capacity utilisation, stocks,
sales, market share, investments and employment.
The second category of information is based on
injury
certain performance
the
indicators of
in particular profitability,
Community industry,
prices, price evolution and price undercutting,
collected from the sampled Community producers.

1. Global injury indicators

(28) On the basis of a variety of documents such as
press releases, extracts from the non-confidential
replies to the Commission’s questionnaire and
annual reports of European groups such as Monark,
Atag and Derby to which some sampled producers
belong, TBEA and EBIA claimed that these major
groups have made significant
improvements in
terms of turnover, production volume and profit-
ability. This was in contradiction with the injury
finding reached at the provisional stage.

(29)

turnover

In this respect, it should be underlined that TBEA
and EBIA, in support of the alleged increases in
or profitability,
production volume,
mainly provided information at a group level and
not specifically for the product concerned. It is
considered that this cannot invalidate the provi-
sional findings made on the global injury indicators
for the whole Community industry which are based
on the situation related to the product concerned
and reflect the situation of all individual companies
included in the groups.

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are

the

abovementioned groups

also
Indeed,
involved in business activities other than bicycles.
The share of the bicycle business in the overall
activity varies between approximately 27 % to
70 % depending on the group. It is also recalled
that the total share of these three groups in the
Community bicycle market was established at
around 28 % during the investigation period.
Furthermore, even though acquisitions may result
in an overall increase in production and sales value
as well as an increase in turnover within a whole
group, especially when economic indicators are
considered regardless of the inclusion of a new
company in the group,
they are nevertheless
compensated for by the demise of independent
companies. This assumption does not contradict
the fact that individual companies within the group
and the group itself may have decreased produc-
tion, sales volume, turnover and profit throughout
the whole period under investigation.

On this basis, the TBEA’s and EBIA’s conclusion
that the overall performance of these groups had
improved in terms of their operations in relation to
the product concerned cannot be accepted.

complainant Community producers, as set out in
recitals 46 to 47 of the Provisional Duty Regula-
tion, was investigated.

Investigating entire groups instead of
individual
companies within the groups, as suggested by
TBEA and EBIA, however, would have required the
investigation of a significantly larger number of
companies than the nine currently investigated and
would thus have been contrary to the very reason
why sampling in accordance with Article 17 of the
Basic Regulation was used in the current investiga-
tion.

(33)

In any event, the current investigation has been
conducted in a way ensuring that all extraordinary,
non-operative or financial items or subsidiary activ-
ities which were not directly linked to the product
concerned were disregarded when assessing the
individual
factors which led to the provisional
conclusions on injury. Such an approach excluded
the possibility of transferring revenue from one
company to another within the group or allocating
excessive general costs to the bicycle activity.

(30)

Since the information supplied by TBEA and EBIA
is neither
adequate
consistent nor provides
evidence to invalidate or put
into question the
detailed analysis made by the Commission in re-
citals 58 to 73 of the Provisional Duty Regulation,
the findings set out in these recitals are therefore
definitely confirmed.

(34)

In addition,
it was ensured that only indicators
reflecting an arm’s length relationship between
companies belonging to the same group were used
to establish the performance-related injury indic-
ators of the Community industry.

2. Performance-related injury indicators

(35) Consequently, there is no ground for TBEA and
EBIA to conclude that the injury determinations
were flawed. The provisional findings made for all
performance-related injury indicators
thus
confirmed.

are

(31)

the

assessed

situation of

the Commission
TBEA and EBIA argued that
should have
the
Community industry on the basis of an investiga-
tion of the entire groups to which sampled compa-
nies respectively belong instead of collecting infor-
mation from some individual members in the
groups. They claimed that the selection of one or
two companies within a group does not allow an
overall analysis of the group and prevents taking
into account the impact of sales within the group,
in other words the sales between related parties.
The injury determinations were therefore flawed
according to TBEA and EBIA.

(32)

Recital 5 of the Provisional Duty Regulation stated
that in view of the large number of Community
producers expressly supporting the complaint,
sampling was used and a representative sample of

2. Price undercutting determinations

(36)

TBEA and EBIA contested the methodology (re-
citals 54 to 57 of the Provisional Duty Regulation)
used by the Commission when determining the
provisional undercutting margins. They claimed
these margins were inflated because the
that
Commission did not offset any negative amount
with the positive amount by which the Taiwanese
exporters’ prices undercut those of the Community
industry. According to them the actual undercut-
ting margin and the level of competition could
only be measured by including in the calculations
the amount by which the Community industry
prices undercut those of the Taiwanese exporters.

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(37)

by

In the undercutting methodology used by the
Commission, the weighted average net sales prices
of
the dumped imported bicycles from Taiwan
were compared, on a model-by-model basis, with
the average net sales price of bicycles produced and
sold
the
Community market. Therefore, contrary to the
claim made by TBEA and EBIA, this methodology
allowed the amount by which the Taiwanese price
the
of one particular model exceeded that of
Community industry price to be taken into account
on a transaction-by-transaction basis.

the Community

industry

in

3. Profitability of the Community industry

(38)

TBEA and EBIA considered that the findings of
the Commission in recital 70 of the Provisional
Duty Regulation, i.e. that profitability has become
negative since 1995 despite efforts made by the
sampled Community producers to restructure and
reduce costs, are not consistent with its findings on
the evolution of prices which show a steady posi-
tive trend.

(39) As indicated in recital 83 of the Provisional Duty
Regulation, it should be noted that not all prices of
the individual models produced and sold by the
Community industry had a positive trend or
increased during the whole period under exam-
ination. On the contrary for mountain bikes (MTB),
as stated in recital 83 of the Provisional Duty Regu-
lation, prices decreased by up to 12 % in certain
Member States where Taiwanese bicycles
are
mainly sold, namely the United Kingdom (UK),
France and Germany. Furthermore, it cannot be
concluded that the overall trend followed for prices
and costs should automatically apply to profit-
ability. To reach such a conclusion, an analysis,
taking into account other economic factors, besides
price evolution, is required. In the present context,
these factors are economy of scale, cost of produc-
tion per unit and product mix.

(40)

Indeed, as stated in recitals 65 and 66 of the Provi-
sional Duty Regulation, between 1994 up to the
investigation period, the volume of sales made by
the Community industry to unrelated customers in
the Community market decreased by 22 % (about
1,8 million units) and sales value decreased by
14 % resulting, on the one hand, in a significant
loss in the economy of scale and increased unit
production costs. On the other hand, even though
certain costs could be reduced as a result of restruc-
turing, taking into account the above two trends, in
the present case an increase in the unit cost of
production (COP) for most models of bicycles has
occurred. This tendency has been reinforced by the

fact that, as mentioned in recital 67 of the Provi-
sional Duty Regulation, the Community industry
has produced higher
involving
higher production costs and higher sales prices.
Overall, the impact of the above situation on profit-
ability was negative.

range bicycles

(41) Given the bad situation in the Community market
and the pressure exerted on sales prices, the reduc-
tion of indirect costs and sales price increases were
not high enough to compensate for the direct costs
and COP per unit increases.

(42)

(43)

the above economic factors
The evolution of
explains why the Community industry’s profit-
ability remained negative throughout
the whole
period under examination despite increases in sales
prices and certain reductions in costs. The contents
of recital 70 of the Provisional Duty Regulation are
hereby confirmed.

4. Conclusion on injury

the injury indicators of

The findings which led to the provisional conclu-
sion that the situation of the Community industry
deteriorated throughout
the whole period under
examination have been reviewed in the light of
each claim made by TBEA and EBIA. This review
confirmed that all
the
Community industry, namely production (–20 %),
capacity (–18 %) and capacity utilisation (–3 %),
sales
in terms of volume (–22 %) and value
(–14 %), market share in terms of volume (–7 %)
(–4 %), negative profitability and
and value
(–15 %), provisionally established
employment
therefore
were
correct. These
the
confirmed as well as
Community
injury
industry
within the meaning of Article 3 of the Basic Regu-
lation.

findings
the conclusion that
suffered material

are

On the basis of the above facts and considerations,
the provisional findings, as well as the provisional
conclusions on injury as indicated in recitals 74 to
77 of the Provisional Duty Regulation, are hereby
confirmed.

H. CAUSATION OF INJURY

1. Effect

dumped
of
Community industry

imports

on

the

1. Volume of imports from Taiwan

(44)

TBEA and EBIA claimed that a significant number
of bicycles imported from Taiwan were not
in
direct competition with bicycles manufactured by

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the Community industry since not all bicycles
imported from Taiwan were
compared with
Community produced ones in the price undercut-
ting exercise and therefore could not have neg-
atively affected the Community industry.

volume, Taiwanese imports increased by 300 000
units, namely 55 % of the overall increase during
the whole period under examination. Under these
circumstances, and bearing in mind the findings
the Provisional Duty
specified in recital 81 of
Regulation, low-priced dumped Taiwanese bicycles
negatively affected Community industry.

(45)

imports of bicycles

In addition, according to TBEA and EBIA, the
Community industry did not suffer injury caused
by bicycles imported from Taiwan. Although the
volume of
from Taiwan
increased during the period under examination, the
increase was very moderate and, in fact, it did not
even compensate for the decline in total imports
following the imposition of anti-dumping measures
against
imports from the People’s Republic of
China, Malaysia, Indonesia and Thailand. Between
1994 and the investigation period, imports from
countries other than Taiwan decreased by approx-
imately 1 000 000 units whereas in the same period
of time imports from Taiwan only increased by
550 000 units. They thus concluded that import
pressure on the Community was in fact signifi-
cantly reduced during the period under exam-
ination.

(46) As regards the first argument, the fact that not all
models of the product under investigation were
compared in the context of the examination of
price undercutting cannot lead to the conclusion
that these models are not comparable or not in
competition in the Community market. Indeed,
the investigation has shown that despite the high
number of possible variations in bicycles available
in both the Taiwanese and the Community market,
they all have the same basic physical and technical
characteristics and uses and that all bicycles should
therefore be regarded as being one single product.

(47) As regards the second argument above, related to
the impact of high import volumes from Taiwan, it
was found in recital 79 of the Provisional Duty
Regulation that Taiwan was by far
the main
exporter of bicycles to the Community with a share
of 55 % of imports during the investigation period.
That performance was achieved despite the fact
that
the Community market had continually
shrunk since 1994: the market size measured in
units decreased by 16 %. Whereas the Community
industry lost sales volume (–22 %), as did other
operators in the Community market, only Tai-
wanese
their
import volume (+ 25 %) at a time during which
their
steadily decreased (–19 %)
between 1995 and 1996. Whereas the Community
industry lost around 1,8 million units in sales

continued to increase

sales prices

exporters

2. Evolution of market share

indicates

(48) According to TBEA and EBIA, the evolution of the
market share of the complainant and non-com-
plainant Community producers
the
absence of detrimental effects caused by Taiwanese
imports. In 1994, all Community producers held a
70,4 % share of the Community market. During
the investigation period this share, slightly reduced
by 2 percentage points, was still as high as 68 %.
This reduction however allegedly hides the fact that
the market share held by individual Community
producers had improved. As indicated in recital 58
of the Provisional Duty Regulation several com-
panies went bankrupt or closed down during the
period under consideration, thereby reducing the
the
number of Community producers. Since
remaining producers hold a market share compar-
able to that held by the arguably more numerous
producers back in 1994, TBEA and EBIA
concluded that
these remaining producers have
allegedly increased their own market share at the
expense of other European manufacturers.

(49)

investigation period,

The focus on market share as advocated by TBEA
and EBIA blurs in this particular case the results of
a proper analysis. As far as the Community produ-
cers are concerned, it was found in recital 71 of the
Provisional Duty Regulation that between 1994 up
to the
the Community
industry lost 7 % of its share in the market in
terms of volume and 4 % of the market in value.
The loss in sales volume was around 1,8 million
units during that period of time. The market share
held by the other Community producers, namely
those not
the
Community industry, increased both in terms of
volume (+ 2 %) and in terms of value (+ 5 %).
However, they also lost considerable sales volume
(–600 000 units) during that period.

included in the definition of

In the meantime, the market share of Taiwanese
exporters in terms of volume increased by 50 % or
by 5,8 percentage points, namely three times more
than the other Community producers. Moreover,

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Official Journal of the European Communities

25. 2. 1999

they managed to increase their sales volume by
550 000 units. Consequently the above findings
clearly contradict the assumptions made by TBEA
and EBIA on market
share. From the above
analysis it can be concluded in fact that the spec-
tacular increase in the market share held by Tai-
wanese exporters was made at the expense of both
complaining and non-complaining Community
manufacturers.

3. Price evolution of the Community industry

2. Evolution of consumption

detrimentally

the same time sales of

(53) According to TBEA and EBIA, the negative devel-
opment of consumption is one of the factors which
has
the Community
affected
industry. It was claimed that from 1994 up to the
investigation period the demand for bicycles in the
Community market decreased by approximately 3
million units. At
the
Community industry decreased by 1,8 million
units. It was precisely when consumption was at its
the Community
lowest, namely in 1996,
industry recorded its worst financial results, namely
–2,3 %. During the investigation period, when
consumption increased, the financial situation of
the Community industry slightly improved since it
recorded a negative return on sales of only –l,3 %.
They claimed that this shows a clear correlation
between the evolution of Community consumption
and the performances of the Community industry.

that

TBEA and EBIA noted that the prices of bicycles
sold by the Community industry had developed
positively during the whole period under exam-
ination with prices increasing by 6 % between
1994 and the investigation period. Prices increased
by 11 % between 1995 and 1996 and by a further
2 % between 1996 and the investigation period.

(54)

(50)

(51)

The overall price development of the Community
industry was indeed positive between 1994 and the
investigation period. As stated in recital 59 of the
Provisional Duty Regulation, however, such a trend
resulted from the fact that the Community industry
changed its product mix and concentrated on
higher range products. Nevertheless, the investiga-
tion has also shown that as price increases did not
allow that industry to cover its costs of production,
profitability has remained negative since 1995. It
was also established in recital 83 of the Provisional
Duty Regulation that price evolution had also
shown negative trends, depending on the model
and pressure from unfair competition from low-
priced dumped Taiwanese imports. The average
price for homogeneous MTB models, namely
MTBs whose components did not change much,
showed a decrease of up to 12 % from 1994 to the
investigation period, depending on the Community
market.

(52) Given the fact that 60 % of Taiwanese imports
were mainly concentrated in the low-end range of
the MTB segment, where Community prices were
mainly depressed, it is considered that the pricing
behaviour of
the Taiwanese exporters negatively
affected the Community industry.

In recital 100 of the Provisional Duty Regulation,
the Commission found that
it could not be
excluded that the negative evolution of consump-
tion contributed to the difficult situation of the
Community industry. However, it was concluded
that its impact was not such as to break the causal
link between dumped imports from Taiwan and
injury suffered by the Community
the material
industry. In any event, even if there is some cor-
relation between the development of consumption
and the performance of the Community industry,
this alone does not sufficiently explain the bad
performance of the Community industry in periods
when consumption was developing positively.

3. Undercutting by other Community produ-

cers

(55) According to TBEA and EBIA, part of the injury
caused to the Community industry was due to the
significant undercutting practised by non-com-
plainant Community producers located in Italy.
They claimed that sales of such producers were
particularly important in the most representative
Community markets and were made at extremely
low prices undercutting Taiwanese prices. In order
to substantiate the alleged injurious behaviour of
these producers, TBEA and EBIA referred to Euro-
stat statistics for 1996 and 1997 and compared the
Taiwanese prices in nine Member States with prices
of shipments from Italy. It was found that only in

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Official Journal of the European Communities

L 49/9

(56)

the UK did the average Taiwanese import price
undercut that of Italian producers. They explained
that these low Taiwanese prices were due to the fact
that the main Taiwanese imports into the UK were
children’s bicycles, which are cheaper than other
bicycles.

It should be noted that, contrary to the price
comparison described in recitals 54 to 57 of the
Provisional Duty Regulation, TBEA and EBIA did
not make any basic distinction in their price
comparison between the bicycle categories defined
in recital 14 of the Provisional Duty Regulation.
They did not even consider the fact that Eurostat
statistics provided separate information for
the
three CN codes involved in the present investiga-
tion and that one code in particular contains infor-
mation relating to very basic bicycles without ball-
bearings. As an example, despite the fact that child-
ren’s bicycles are less sophisticated, they did not
distinguish between the difference in the product
mix and homogeneous categories of bicycles sold
in the Community market by Taiwanese and
Italian operators. Moreover, no distinction was
made between complainant and non-complainant
Italian producers. Nor did they consider the fact
that the Eurostat statistics contain information on
bicycles of all origins. Finally, TBEA and EBIA
ignored the fact that Italian producers were selling
their bicycles under different sales conditions from
those of the Taiwanese, thus affecting the meaning-
fulness of the price comparison exercise. From a
methodological point of view their findings are
thus highly questionable.

(57)

The findings made in recitals 91 to 95 of the
Provisional Duty Regulation concerning the non-
complainant Community producers are therefore
confirmed.

the Community producers
shown that some of
included in the sample were able to reduce their
costs by selling equipment or buildings. In partic-
ular, this allowed certain large European groups to
slightly improve their overall financial situation,
and to make certain cuts in costs, such as over-
heads, depreciation, renting, financial costs, etc.

(60)

Important operations such as mergers and acquisi-
tions were indeed performed by some European
groups in the framework of the globalisation trend.
Mergers and acquisitions should not be seen as the
cause of the negative situation of the companies
concerned but rather as its consequence. As regards
global
such as production,
production capacity and unemployment, the evolu-
tion of the situation of the companies merged or
acquired during the period under examination was
taken into account since they form the Community
industry.

indicators,

injury

However, any impact caused by the cost of mergers
and acquisitions in the financial situation of the
companies forming the Community industry, and
more so in the sampled Community producers, was
disregarded. It
follows that costs resulting from
mergers, acquisitions or group restructuring are not
reflected in the findings which led to the above
conclusion of material
injury suffered by the
Community industry.

(61) Consequently, the restructuring of the Community
industry cannot be held responsible for the mate-
rial injury it has suffered.

5. Conclusion on causation

(62) As a result of the above facts and considerations,
the provisional analysis and relative conclusions on
causation are hereby confirmed.

4. Restructuring

I. COMMUNITY INTEREST

(58) According to TBEA and EBIA, the Community
industry had to significantly restructure its activities
by way of mergers and acquisitions, which were
responsible for the reduction in production capa-
cities, unemployment and cost increases.

(63) Contrary to the conclusions reached in the Provi-
sional Duty Regulation, EBIA claimed that there
are compelling reasons that the adoption of anti-
dumping measures
in the Community
is not
interest.

(59) As indicated in recital 103 of the Provisional Duty
Regulation, the European bicycle industry under-
took rationalisation and restructuring efforts, still
going on today, demonstrating at the same time
this industry’s adaptability to new market situa-
tions. However, contrary to the suggestion made by
TBEA and EBIA, the restructuring did not neces-
sarily lead to increased costs. The investigation has

1. Interest of the Community industry

(64)

In recital 103 of the Provisional Duty Regulation, it
was found that the material injury suffered by the
Community industry due to unfair competition
from low-priced dumped imports
rendered it
situation had indeed
highly vulnerable. This

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Official Journal of the European Communities

25. 2. 1999

required additional rationalisation and restructuring
efforts in particular by the small manufacturers.
Many European companies had to close down or
revert to assembling rather than producing bicycles.
Not imposing anti-dumping duties on low-priced
dumped imports from Taiwan would thus under-
mine all the efforts made by European manufac-
turers over the last few years in order to survive and
remain competitive on the market.

Since no comments with regard to the interest of
the
the Community
contents of recitals 103 to 105 of the Provisional
Duty Regulation are hereby confirmed.

industry were

received,

2. Interests of importers, dealers and retailers

EBIA claimed that many Community importers,
dealers and retailers have invested a great deal of
time, effort and money over the years in promoting
certain brands within the Community. These
investments will be detrimentally affected by the
imposition of anti-dumping measures. Further-
more, they added that the survival of the retailers
relies upon the diversity and quality of the bicycles
which only Taiwanese manufacturers can offer.
Numerous jobs across Europe are allegedly being
jeopardised by the imposition of anti-dumping
measures.

(65)

(66)

is considered that

(67) While taking the above claims into consideration,
it should also be borne in mind that dealers and
retailers working with the Community industry
also invested time and money in their respective
businesses. Therefore,
the
it
negative effects of anti-dumping measures on
retailers should be seen in the light of the contents
of recital 110 of the Provisional Duty Regulation.
the imposition of anti-dumping
In any event,
measures will not put dealers and retailers buying
and selling Taiwanese bicycles in an unfairly disad-
vantageous situation as compared to other retailers
in the Community market. The proposed measures
will simply correct the distorting effects of injuri-
ous dumping and restore fair trade competition
among all the operators in the Community. More-
over, price
automatic.
increases will not be
Although price increases might occur as a result of
the imposition of the anti-dumping duty, as indic-
ated in recital 111 of the Provisional Duty Regula-
tion, these increases should be very limited.

(68) As mentioned in recital 108 of

the Provisional
Duty Regulation, very few meaningful replies were
received from importers who are members of
EBIA. After the imposition of the provisional anti-
dumping duties, the Commission intended to carry
out on-the-spot investigations in order to further
investigate the situation of
in the
Community market, and to verify the relevance of
the above claims. Since none of the members of
EBIA agreed to cooperate with the Commission,
the above claims concerning importers cannot be
taken into consideration.

importers

(69)

(70)

In these circumstances, and in the absence of any
the
information which suggests
conclusions
stage
concerning the effect of the imposition of anti-
and
dumping measures on importers,
retailers are hereby confirmed.

the provisional

the contrary,

reached at

traders

3. Interest of consumers

on

consumers.

EBIA also claimed that
imposing anti-dumping
measures on bicycles is most likely to have several
negative
The
consequences
increase; many
consumer price of bicycles will
models of bicycles will no longer be affordable and
consumers will be forced to buy low-end range
bicycles. The Community market will be in the
hands of a reduced number of European manufac-
turers and the availability of low-priced bicycles of
low quality imported from other sources such as
eastern European countries and India will increase.
The restriction in choice and innovation in
bicycles will have negative consequences on a
number of cyclists, particularly in Member States
where Taiwanese bicycles have a very high market
share. Accordingly, the imposition of anti-dumping
measures is allegedly not in the interest of the
Community consumers.

(71) With the exception of

the effect of

the anti-
dumping measures on consumer bicycle prices,
these issues have already been dealt with above.
Consequently, the quality of bicycles sold in the
Community market, competition and consumer
choice in the Community market will not be
affected by the imposition of anti-dumping meas-
ures.

(72) As far as the consumer price increase is concerned,
EBIA did not provide any economic analysis indic-
ating an alleged increase in consumer prices if
anti-dumping measures were imposed. Given the

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Official Journal of the European Communities

L 49/11

in

chain
distribution
the
the maximum impact of

the
of
margin
Community,
the anti-
dumping duty on the consumer price should be
limited to 2,6 %. However, given the large number
of competitors in the market, it is far from certain
that the adoption of anti-dumping measures will
result in any price increases at consumer level.

4. Consequences on competition in the

Community market

strongly suggests that there is no risk of such a
threat to them. On the contrary, their behaviour
rather indicates that they are convinced that their
if no anti-
situation would deteriorate further
low-
dumping measures were imposed against
priced dumped imports from Taiwan.

(78) Consequently, on the basis of the above facts and
considerations, the contents of recitals 116 to 118
of the Provisional Duty Regulation are confirmed.

5. Reduced innovation in the Community

(73)

(74)

EBIA is of the opinion that the imposition of anti-
dumping measures would contribute to the cre-
ation of an oligopoly formed by Atag, Monark and
Derby
companies
included in the sample belong. With anti-dumping
measures in force, these groups will allegedly be
able to dominate the market and control the beha-
viour of small independent manufacturers.

to which some

individual

(79)

EBIA also claimed that the imposition of any anti-
dumping duty adding up to the already high
customs duty of 15,4 % will contribute to reducing
competition on the Community market. They
recalled that the measures against Taiwan conclude
a series of anti-dumping measures imposed against
China, Indonesia, Malaysia and Thailand.

in

that given the important role of
EBIA submit
Taiwanese
the
bicycle manufacturers
Community market who offer a broad range of
high quality products it is not in the Community
interest to impose anti-dumping measures. It has
been claimed that the Taiwanese can be credited
with the most technical breakthroughs from the
introduction of MTBs to full suspension bicycles
and beyond. They are also reputed for their R & D
allegedly leading the way in the production of
a
power-assisted/electrically-powered
growing sector in the market, and also being the
world’s leading producer of
folding bicycles. In
particular, EBIA claimed that 2,2 % of Taiwanese
manufacturers’ turnover is invested in long-term
investments in R & D.

bicycles,

(75) As indicated in recital 117 of the Provisional Duty
Regulation, there are a great many operators in the
so there is no risk of a
Community market
monopolistic
situation being
created. On the contrary,
the investigation has
shown that there is a lot of competition among all
European manufacturers and importers
in the
Community market.

oligopolistic

or

(76) As indicated in recital 62 of the Provisional Duty
the three
the total market share of
Regulation,
main European groups in the Community market
is around 28 %. In total,
there are around 70
producers in the Community, most of them small
and medium-sized enterprises (SMEs), who have
considerable experience in the bicycle business. In
addition,
importers of
bicycles made in the USA, the Czech Republic,
Poland, India, Vietnam, Indonesia, Korea, Malaysia,
etc. It is therefore considered that there is no risk
of a monopolistic situation being created in the
Community.

there are hundreds of

(80) Contrary to the suggestion made by EBIA, Taiwan-
imported in the Community are
ese bicycles
concentrated on the low-range models, whereas
only about 7 % of these imports can be considered
as being in the high-range. The information avail-
able also indicates that during the investigation
period the sampled Taiwanese exporting producers
invested not 2,2 % but approximately only 1 % of
turnover in R & D, i.e. less than the Community
industry.

(81)

Finally, considering that the level of measures will
not prevent Taiwanese bicycles being sold in the
Community market,
anti-
the
dumping measures will not affect the pace of in-
novation as far as it is determined by imports from
Taiwan.

imposition of

6. Conclusion

(77) Moreover, the fact that small manufacturers wished
to support and participated in the investigation and
in addition were not opposed to the conclusions
reached in the Provisional Duty Regulation

(82) As no new conclusive evidence or arguments were
received in connection with the determination of
Community interest, the provisional findings are
hereby confirmed.

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Official Journal of the European Communities

25. 2. 1999

J. DEFINITIVE ANTI-DUMPING DUTY

(83)

Since no arguments to invalidate the provisional
findings which led to the imposition of the provi-
sional anti-dumping duty were put forward by the
interested parties, the contents of recitals 121 to
125 of
the Provisional Duty Regulation are
confirmed.

(84) On the above basis, given the wide variety of
bicycles exported from Taiwan, an ad valorem duty
is still considered to be the most appropriate form
of measure.

(85)

(86)

K. COLLECTION OF

THE
DUTIES

PROVISIONAL

In view of the magnitude of the dumping margins
found for the exporting producers and in the light
the injury caused to the
of
the seriousness of
Community industry,
is considered necessary
it
that the amounts secured by way of provisional
anti-dumping duties for transactions involving the
product concerned should be definitively collected
at the level of the definitive duties.

L. FUTURE REQUESTS FOR NEW EXPORTER

TREATMENT

Since sampling has been used in the investigation,
a new exporters’ review pursuant to Article 11(4) of
the Basic Regulation with the objective of deter-
mining individual dumping margins cannot be
initiated in this proceeding. However, as already
explained in recitals 8 and 9 above, in order to
for any genuine new
ensure equal
exporting producer and the cooperating companies
not included in the sample, it is considered that
provision should be made for the weighted average
duty imposed on the latter companies to be applied
to any new exporting producer who would other-
wise be entitled to a review pursuant to Article
11(4) of the Basic Regulation,

treatment

Products manufactured by the companies listed in
3.
the Annex shall be subject to a definitive anti-dumping
duty rate of 5,4 % (TARIC additional code 8548).

listed
Products manufactured by the companies
4.
below shall be subject to the following definitive anti-
dumping duty rates:

Company

Fritz Jou Manufacturing Co., Ltd
Giant Manufacturing Co., Ltd
Merida Industry Co., Ltd
Ming Cycle Industrial Co., Ltd

Rate
of duty

10,2 %
2,4 %
2,5 %
2,5 %

TARIC
additional
code

8698
8699
8551
8552

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

Article 2

Where any new exporting producer in Taiwan provides
sufficient evidence to the Commission that

— it did not export to the Community the products
described in Article 1(1) during the investigation
period (1 November 1996 to 31 October 1997),

— it is not related to any of the exporters or producers in
Taiwan which are subject to the anti-dumping meas-
ures imposed by this Regulation,

— it has actually exported to the Community the prod-
ucts concerned after the investigation period on which
the measures are based, or it has entered into an
irrevocable contractual obligation to export a signifi-
cant quantity to the Community,

the Council, acting by simple majority on a proposal
submitted by the Commission after consulting the
Advisory Committee, may amend Article 1(3) of
this
Regulation by adding the new exporting producer to the
list in the Annex referred to in that Article.

HAS ADOPTED THIS REGULATION:

Article 3

Article 1

1. A definitive anti-dumping duty is hereby imposed
on imports 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 definitive anti-dumping duty applic-
2.
able to the net, free-at-Community-frontier price, before
duty, shall, subject to paragraphs 3 and 4, be 18,2 %
(TARIC additional code 8900).

Amounts secured by way of the provisional anti-dumping
duty imposed by Regulation (EC) No 1833/98 shall be
definitively collected at the duty rate definitively imposed.
Amounts secured in excess of the definitive rate of the
anti-dumping duty shall be released.

Article 4

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

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L 49/13

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

Done at Luxembourg, 22 February 1999.

For the Council

The President

H.-F. von PLOETZ

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25. 2. 1999

ANNEX

Acetrikes Industrial Co., Ltd., Changhua
Asahi Enterprises Corporation, Tainan
Axman Enterprise Co., Ltd., Taichung
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
Hsieh Chan Bicycle Co., Ltd., Changhua
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