Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of certain footwear with uppers of leather originating in Vietnam and originating in the People's Republic of China, as extended to imports of certain footwear with uppers of leather consigned from the Macao SAR, whether declared as originating in the Macao SAR or not, following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96
Date: 2009-11-27
Institutions: European Commission
Subjects: China, Macao, Viet Nam, anti-dumping duty, anti-dumping legislation, footwear industry, import, leather, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.11.2009 
COM(2009)655 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain footwear with uppers of 
leather originating in Vietnam and originating in the People's Republic of China, as 
extended to imports of certain footwear with uppers of leather consigned from the 
Macao SAR, whether declared as originating in the Macao SAR or not, following an 
expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96  

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EXPLANATORY MEMORANDUM 

1) CONTEXT OF THE PROPOSAL 

  •  Grounds for and objectives of the proposal 

This proposal concerns the application of Council Regulation (EC) No 384/96 
of  22  December  1995  on  protection  against  dumped  imports  from  countries 
not  members  of  the  European  Community,  as  last  amended  by  Council 
Regulation (EC) No 2117/2005 of 21 December 2005 (‘the basic Regulation’) 
in  the  proceeding  concerning  imports  of  certain  footwear  with  uppers  of 
leather  originating  in  Vietnam  and  originating  in  the  People's  Republic  of 
China,  as  extended  to  imports  of  certain  footwear  with  uppers  of  leather 
consigned from the Macao SAR, whether declared as originating in the Macao 
SAR or not. 

  •  General context 

This  proposal  is  made  in  the  context  of  the  implementation  of  the  basic 
Regulation  and  is  the  result  of  an  investigation  carried  out  in  line  with  the 
substantive and procedural requirements laid out in the basic Regulation.  

  •  Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  1472/20061  of  5  October  2006  imposing  a 
definitive  anti-dumping  duty  and  collecting  definitely  the  provisional  duty 
imposed  on  imports  of  certain  footwear  with  uppers  of  leather  originating  in 
the People's Republic of China and Vietnam.  

Council  Regulation  (EC)  No  388/20082  of  29  April  2008  extending  the 
definitive anti-dumping measures imposed by Regulation (EC) No 1472/2006 
on  imports  of  certain  footwear  with  uppers  of  leather  originating  in  the 
People’s Republic of China to imports of the same product consigned from the 
Macao SAR, whether declared as originating in the Macao SAR or not. 

  •  Consistency with other policies and objectives of the Union 

Not applicable. 

2) CONSULTATION OF INTERESTED PARTIES AND IMPACT 
ASSESSMENT 

  •  Consultation of interested parties 

1 
2 

OJ L 275, 6.10.2006, p. 1. 
OJ L 117, 1.5.2008, p. 1. 

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Interested  parties  concerned  by  the  proceedings  have  had  the  possibility  to 
defend their interests during the investigation in line with the provisions of the 
basic Regulation. 

  •  Collection and use of expertise 

  There was no need for external expertise. 

  •  Impact assessment 

This proposal is the result of the implementation of the basic Regulation.  

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but 
contains an exhaustive list of conditions that have to be assessed. 

3) LEGAL ELEMENTS OF THE PROPOSAL 

  •  Summary of the proposed action 

The  request  was  lodged  by  the  European  Confederation  of  the  Footwear 
Industry  (CEC,  'the  applicant'),  on  behalf  of  producers  representing  a  major 
proportion of the total Community production of the product concerned.  

Having  determined  that  sufficient  evidence  existed  for  the  initiation  of  the 
reviews, the Commission initiated the case on 3 October 20083. 

The investigation showed that there is a likelihood of continuation of injury for 
the  short/medium  term,  until  the  process  of  adjustment  of  the  Community 
industry has been completed. The duration of the measures should therefore be 
limited to 15 months. 

It is proposed that the Council adopts the attached proposal for a Regulation, 
which should be published in the Official Journal of the European Union at the 
earliest convenience. 

  •  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against  dumped  imports  from  countries  not  members  of  the  European 
Community, as last amended by Council Regulation (EC) No 2117/2005 and 
in particular article 11 (4) thereof.  

  •  Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Community.  The 

3 

OJ C 251, 3.10.2008, p. 21. 

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subsidiarity principle therefore does not apply. 

  •  Proportionality principle 

The  proposal  complies  with  the  proportionality  principle  for  the  following 
reasons. 

  The form of action is described in the basic Regulation and leaves no scope for 

national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the 
Community,  national  governments,  regional  and  local  authorities,  economic 
operators  and  citizens  is  minimized  and  proportionate  to  the  objective  of  the 
proposal is not applicable. 

  •  Choice of instruments 

  Proposed instruments: Council Regulation. 

  Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not 

foresee alternative options. 

4) BUDGETARY IMPLICATION 

  The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain footwear with uppers of 
leather originating in Vietnam and originating in the People's Republic of China, as 
extended to imports of certain footwear with uppers of leather consigned from the 
Macao SAR, whether declared as originating in the Macao SAR or not, following an 
expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96  

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 not members of the European Community (the 'basic 
Regulation') and in particular Articles 9(4) and 11(2) thereof,  

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

Whereas: 

1. 

Measures in force 

A. PROCEDURE 

(1) 

(2) 

On  5  October  2006,  the  Council,  by  Regulation  (EC)  No  1472/20064  (the  'original 
Regulation'),  imposed  a  definitive  anti-dumping  duty  on  imports  of  certain  footwear 
with uppers of leather originating in the People's Republic of China ('PRC' or 'China') 
and  Vietnam  (the  'countries  concerned').  The  established  duty  levels  were  ranging 
from 9.7% to 16.5% in case of the PRC and 10% in case of Vietnam. Measures were 
imposed for a period of two years. The investigation that led to these measures will be 
referred to as the 'original investigation'.  

By  Regulation  (EC)  No  388/2008  (5)  (the  'extending  Regulation'),  the  Council 
extended  the  anti  definitive  anti-dumping  duty  on  imports  of  certain  footwear  with 
uppers of leather originating in the PRC to imports consigned from the Macao Special 
Administrative Region ('SAR'), whether declared as originating in the Macao SAR or 
not. The extension  followed an anti-circumvention investigation carried out pursuant 
to Article 13(3) of the basic Regulation. 

2. 

Present Investigation 

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OJ L 275, 06.10.2006, p. 1. 
OJ L 117, 1.5.2008, p. 1. 

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2.1.  Request for review 

(3) 

(4) 

(5) 

The  request  was  lodged  by  the  European  Confederation  of  the  Footwear  Industry 
(CEC, 'the applicant'), on behalf of producers representing a major proportion, in this 
case  more  than  35%,  of  the  total  Community  production  of  certain  footwear  with 
uppers of leather.  

In  the  framework  of  the  standing  test  several  national  associations  of  footwear 
producers  in  EU  Member  States  expressed  their  views  vis-à-vis  the  opening  of  the 
expiry  review  and  requested  that  their  names  be  kept  confidential  for  fear  that  their 
member  companies  could  face  retaliation  from  some  customers.  Some  other  parties 
questioned  why  the  names  and  the  positions  of  the  opposing  and  supporting 
associations  have  been  kept  confidential.  The  Commission  asked  the  associations 
explicitly again whether they could agree to a disclosure of their name and position. 
Four  associations  agreed  to  disclose  their  names  and  positions,  whereas  the  others 
opposed,  referring  once  more  to  their  fear  for  retaliation  against  their  member 
companies.  The  Commission  took  the  view  that  there  indeed  was  a  significant 
possibility of retaliation in the form of lost sales for these producers and accepted that 
names should not be disclosed. 

Some parties argued that the Commission should not have initiated an expiry review 
investigation as article 3 of the original Regulation states that it shall be in force for a 
period  of  2  years  as  of  its  entry  into  force.  Recital  (326)  of  the  original  Regulation, 
however, explains that, notwithstanding the shorter duration of the measures, the rules 
of  Article  11  of  the  basic  Regulation  will  apply  mutatis  mutandis.  In  line  with  this 
recital,  the  text  of  the  notice  of  impending  expiry6  stated  that  the  measures  would 
expire on 7 October 2008 unless a review was initiated in accordance with the rules of 
article  11(2)  of  the  basic  Regulation.  Since  an  expiry  review  of  the  anti-dumping 
measures  has  indeed  been  initiated,  the  anti-dumping  measures  remain  in  force 
pending this review. 

(6) 

The  request  for  the  expiry  review  was  based  on  the  grounds  that  the  expiry  of  the 
measures  would  be  likely  to  result  in  a  continuation  or  recurrence  of  dumping  and 
injury to the Community industry.  

2.2. 

Initiation 

(7) 

(8) 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed for the initiation of an expiry review, the Commission announced, by a notice 
of  initiation  published  in  the  Official  Journal  of  the  European  Union7  on  3  October 
2008 (the 'Notice of initiation'), the initiation of an expiry review pursuant to Article 
11(2) of the basic Regulation. 

The  investigation  of  likelihood  of  continuation  or  recurrence  of  dumping  and  injury 
covered the period from 1 July 2007 to 30 June 2008 ('review investigation period' or 
'RIP'). The examination of the trends relevant for the assessment of a likelihood of a 
continuation or recurrence of injury covered the period from 1 January 2006 up to the 
end of the RIP (the 'period considered'). Reference was also made where appropriate to 

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OJ C 75, 26.3.2008, p. 25. 
OJ C 251, 3.10.2008, p.21. 

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the year 2005 and to the investigation period used in the original investigation which 
covered  the  period  from  01  April  2004  to  31  March  2005  ('original  investigation 
period' or 'OIP'). 

3. 

Parties concerned by this investigation 

(9) 

The  Commission  officially  advised  the  applicant,  the  Community  producers 
mentioned  in  the  request,  any  other  known  Community  producers,  known  importers 
and  their  associations,  known  retailers/distributors  and  their  associations,  known 
consumer organisations, the known exporting producers in the countries concerned as 
well  as  their  associations  and  the  authorities  of  the  countries  concerned  of  the 
initiation of the expiry review. 

(10) 

Interested parties were given an opportunity to make their views known in writing and 
to request a hearing within the time limits set in the Notice of initiation. 

(11)  All interested parties who so requested and showed that there were particular reasons 

why they should be heard, were granted a hearing. 

4. 

Sampling 

(12) 

(13) 

In  view  of  the  large  number  of  exporting  producers  in  the  countries  concerned,  of 
Community producers and of importers involved in the investigation, the application 
of sampling was envisaged in the Notice of initiation in accordance with Article 17 of 
the basic Regulation. 

In  order  to  enable  the  Commission  to  decide  whether  sampling  would  be  necessary 
and, if so, to select a sample, exporting producers and representatives acting on their 
behalf,  Community  producers  and  importers  were  requested  to  make  themselves 
known and to provide information as specified in the Notice of initiation. 

4.1. 

Sampling for exporting producers in the People's Republic of China and Vietnam 

4.1.1.  The People's Republic of China 

(14)  A  total  of  58  companies  or  groups  of  related  companies  ('groups')  in  the  PRC  came 
forward  and  provided  the  requested  information  within  the  given  deadline.  These  58 
companies  or  groups  produced  and/or  exported  the  product  concerned  to  the 
Community  market  during  the  investigation  period  and  expressed  a  wish  to  be 
included  in  the  sample.  They  were  regarded  as  co-operating  companies  and  were 
considered for inclusion in the sample. The level of cooperation from the PRC, i.e. the 
percentage of exports to the EU by the Chinese cooperating companies as compared to 
all Chinese exports to the EU, was around 22 %. 

(15)  The  sample  was  selected  in  agreement  with  the  Chinese  authorities,  on  the  basis  of 
export  volumes  and  geographical  spread  of  the  co-operating  companies.  The  seven 
sampled  companies  represented  around  56%  of  the  exports  to  the  EU  of  the  58  co-
operating companies, and 13 % of the total exports to the EU from the PRC. They all 
replied to the questionnaires within the given deadlines.  

(16)  Certain non-sampled Chinese exporters claimed that since they had not been selected 
to be in the sample, they were not in a position to defend their interests. However, it is 

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part of the principle of sampling that a representative number of exporting producers is 
selected  and  that  the  results  of  the  assessment  of  this  sample  can  be  regarded  as 
representative  also  for  other  co-operating  exporters.  It  is  further  noted  that  all 
interested  parties  were  able  to  participate  in  the  investigation  and  to  submit  their 
views. This argument was therefore rejected. 

4.1.2.  Vietnam 

(17)  A  total  of  51  companies  or  groups  in  Vietnam  came  forward  and  provided  the 
requested  information  within  the  given  deadline.  These  51  companies  or  groups 
produced and/or exported the product concerned to the Community market during the 
investigation  period  and  expressed  a  wish  to  be  included  in  the  sample.  They  were 
regarded as co-operating companies and were considered for inclusion in the sample. 
The level of cooperation from Vietnam, i.e. the percentage of exports to the EU by the 
Vietnamese cooperating companies as compared to all Vietnamese exports to the EU, 
was around 82 %.  

(18)  The sample was selected in agreement with the Vietnamese authorities, on the basis of 
export  volumes.  The  three  sampled  companies  represented  around  27%  of  the  EU 
exports  of  the  51  co-operating  companies,  and  22  %  of  the  total  EU  exports  from 
Vietnam. They all replied to the questionnaires within the given deadlines. 

4.2. 

Sampling of Community producers  

(19)  The procedure to obtain the information necessary for the selection of the sample of 
Community producers was as follows. The CEC acting on behalf of all complainants 
confirmed  that  all  complaining  producers  were  ready  to  cooperate  and  participate  in 
the sampling exercise. Given the detailed and extensive information available on file 
(emanating i.a. from the complaint, standing exercise, and CEC submissions), it was 
not  necessary  to  send  a  sampling  form  to  individual  complaining  producers.  In 
addition,  the  notice  of  initiation  invited  any  producer  to  make  themselves  known 
should  the  wish  to  cooperate  in  the  proceeding.  In  addition  to  the  complainants,  a 
further  five  companies  made  themselves  known  after  initiation  and  requested  to  be 
included  in  the  sampling  exercise.  All  of  these  were  sent  sample  forms  requesting 
information  already  at  hand  for  the  complainants.  Only  two  of  the  five  companies 
supplied sample returns. These two companies were however not retained as they were 
excluded from the definition of the Community industry (see recital (198)). 

(20)  Community production of product concerned is largely concentrated in three Member 
States  holding  around  2/3  of  all  production.  The  rest  is  spread  over  the  remaining 
Member  States.  As  seen  in  recitals  (202)  and  onwards,  the  Community  producers 
business  models  are  characterised  by  differences  mainly  in  product/quality  range, 
distribution  channels  and  whether  clustering  of  activities  and  subcontracting  parts  of 
the manufacturing process within or outside the Community takes place. 

(21)  On the basis of the information obtained, the Commission selected a sample based on 
the  largest  representative  volumes  of  production  and  sales  within  the  Community 
which could be investigated within the time available. However as detailed above, this 
is not an entirely homogenous industry and in order to assess representativeness of the 

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selected  companies,  the  producers'  geographical  spread  amongst  Member  States8,  as 
well as the segment to which their products belong were also taken into consideration. 
As a result 8 Companies operating in four member States were selected. The selected 
companies also represent all the major business models present in the Community, in 
terms  of  how  the  product  is  manufactured,  of  how  the  product  is  distributed,  and  of 
product  specialisation.  Regarding  product  specialisation,  the  companies  selected 
included  production  across  all  major  price  segments  (low  range,  mid  range,  high 
range)  as  well  as  across  all  gender  and  age  segments  (ladies,  men,  unisex,  children 
footwear). Regarding product distribution, the companies selected included all major 
levels  of  distribution  (to  wholesalers,  to  retailers,  as  well  as  direct  retailing). 
Regarding production, the companies selected included full in-house manufacturing in 
all  key  stages  of  the  production  process  as  well  as  companies  which  had  outsourced 
parts of such manufacturing process (both in and outside the Community).  

(22)  The  8  producers  selected  in  the  sample  were  thus  considered  to  be  representative  of 
the overall producers in the Community, and represented 8.2% of the production of the 
complaining  Community  producers  and  3.1%  of  the  total  Community  production. 
Pursuant to art. 17(2) of the basic Regulation, CEC was consulted on the selection of 
the sample and did not raise any objections. 

(23)  The 

that  one  of 

investigation  revealed 

the  sampled  Community  producers 
progressively discontinued production in the Community during the RIP, taking its full 
manufacturing activity outside the Community. It should be noted that the weight of 
the  company  was  not  such  as  to  have  any  significant  impact,  at  least  from  a 
quantitative  point  of  view,  on  the  situation  of  the  sampled  companies  as  a  whole—
including their representativeness. The quantitative findings on injury would not have 
been materially different should this company have been excluded. In this context, and 
given  that  (i)  it  had  produced  in  the  Community  during  the  RIP,  and  that  (ii)  it 
subcontracts large part of the production , a business model which, according to many 
parties,  is  important  in  the  Community,  it  was  decided  not  to  formally  exclude  this 
company  from  the  sample.  This  further  ensures  that,  qualitatively,  the  sample 
represents as adequately as possible the reality of the sector. Furthermore, considering 
that  an  expiry  review  requires  an  analysis  of  continuation/recurrence  of  injury,  this 
may  help  in  better  predicting  how  the  situation  on  the  Community  market  could 
develop if the measures were not continued. However, evidently only data pertaining 
to its activity as Community producer were used. 

(24)  The  Community  institutions  have  considered  whether,  given  that  the  Community 
production  and  sales  of  this  company  during  the  RIP  were  found  to  be  lower  than 
initially reported at sample stage, the Community industry's production and sales as a 
whole  should  have  been  reduced  similarly—i.e.,  the  resulting  impact  on  the  sample 
should  be  transposed  to  the  entire  population.  However,  it  was  found  that  the  error 
appears  to  have  been  made  in  good  faith  by  this  Company  who  mistakenly  counted 
outsourcing to a country in the Community vicinity as Community production. In that 
light,  firstly,  it  is  noted  that  the  sample  is  used  primarily  to  assess  those  injury 

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Considering  that  intra-Community  subcontracting  of  full  or  partial  production  is  common  in  the 
Community,  the  geographical  considerations  also  had  to  take  into  account  the  extent  to  which  the 
ownership of the production process is conferred on companies in the Member State in question or if 
the  production  was  rather  based  on  subcontracting  or  tolling  arrangements  where  ownership  of  the 
finished goods remains with the party ordering the service. 

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indicators  which  cannot  be  reasonably  obtained  for  the  Community  industry  as  a 
whole.  Production  and  sales  have  been  obtained  at  an  aggregated  level  for  the 
Community  industry,  and  therefore  the  argument  is  not  relevant.  In  addition,  the 
information  on  file,  including  that  compiled  in  parallel  via  the  additional  analysis  of 
national  associations  performed  in  this  investigation,  does  not  indicate  any  need  for 
such  an  adjustment.  Finally,  for  argument's  sake,  if  the  full  production  and  sales 
figures for the Community industry in the RIP were reduced to transpose the sample's 
lower  figures,  this  would  neither  affect  the  representativeness  of  the  sample  nor  the 
general conclusions regarding injury.  

(25)  Various interested parties claimed a breach of the Article 17 of the basic Regulation, 
alleging  that  the  sample  of  Community  producers  was  not  representative  in  terms  of 
the percentage of production covered, in terms of production range, sales prices, ratio 
between  production  and  sales,  geographical  spread  as  well  as  profitability  and 
performance.  It  was  also  held  that  the  sample  did  not  take  into  account  the  large 
number of producers that have outsourced production to third countries.  

(26)  These allegations were carefully analysed and in view also of the complexity of this 
case, additional questionnaires were sent, processed and verified on-spot not only for 
individual companies, but also for national associations. In this context, the number of 
companies  selected  in  the  sample  had  to  be  limited  to  what  could  be  reasonably 
investigated within the time available, i.e. 8 companies. 

(27)  Furthermore, given that the Community industry is highly fragmented in this case, it is 
unavoidable  that  the  companies  in  the  sample  cover  a  relatively  small  portion  of  the 
overall  Community  production.  This  fragmentation,  together  with  the  fact  that  the 
larger producers were selected to be in the sample, implies that further increasing the 
number  of  companies  would  in  any  event  not  have  had  a  significant  impact  on  the 
proportion of the sample as compared to the overall Community production. 

(28)  As  explained  above  in  recital  (21),  the  Commission  took  geographical  spread  into 
account when selecting the sample. In is underlined that, by nature, a sample does not 
have to reflect the exact geographical spread (nor the exact distribution or breakdown 
of any other criterion) of the entire population in order to be representative. It suffices 
that,  as  is  the  case  for  the  current  sample,  which  includes  four  Member  states,  it 
reflects the relevant proportions of the major  manufacturing  countries involved.  Any 
other approach would have been administratively impracticable, particularly if several 
different criteria have to be taken into account in order to ensure representativeness. In 
fact, this claim would imply in fine that a sample would be sufficiently representative 
only if it contained the full population. The investigation has thus underlined that the 
sample which covers four Member states, including the three with the by far biggest 
production,  is  largely  representative  of  the  Community  production  as  a  whole,  in 
particular  when  taking  into  account  production  that  is  based  on  tolling  arrangements 
and  therefore  should  be  accounted  for  in  the  Member  state  of  the  company  ordering 
the tolling service. 

(29)  The  sampled  companies  also  included  a  cross-section  of  product  ranges  which 
reflected the relevant orders of magnitude of Community production. In addition, the 
product ranges involved correspond to those of Chinese and Vietnamese exports.  

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(30)  Concerning sales prices, it was also argued that the average sales prices of the sample 
were not representative in relation to the sales prices indicated in the review request. In 
this context it should be noted however that, contrary to this claim, the investigation 
has  shown  that  average  sales  prices  of  the  sample  are  consistent  with  the  prices 
reported  in  the  request.  In  any  event,  even  if  this  would  not  have  been  the  case,  the 
average  sales  prices  of  a  sample  would  not  have  to  be  exactly  the  same  as  those 
reported  in  the  request,  as  long  as  they  are  found  to  reflect  the  sales  prices  of  the 
population of producers as a whole.  

(31)  Regarding  representativeness  in  terms  of  ratio  between  production  and  sales,  it  is 
recalled that in the sector as a whole production is typically made to order and strongly 
reflects fashion trends. Therefore, stock is not a very telling indicator, and production 
closely  approximates  sales.  This  has  been  confirmed  at  complaint  stage  and  also 
during the investigation for sampled companies and for the Community industry as a 
whole.  

(32) 

In  addition  to  the  considerations  as  outlined  above,  it  is  recalled  that  in  any  event 
Article  17  of  the  basic  Regulation  sets  out  that  investigations  may  be  limited  to 
samples  which  are  either  statistically  valid,  or  which  constitute  the  largest 
representative  volume  of  production,  sales,  or  exports  which  can  be  reasonably 
investigated. It is clear from the wording of this provision that there is no quantitative 
indication  or  threshold  as  to  what  constitutes  the  level  of  the  representative  volume. 
The  only  indication  is  that  such  volume  may  be  limited  to  what  can  reasonably  be 
investigated within the time available. 

(33)  For the reasons explained above, the claims made by the various parties were rejected 
and  the  legal  validity  of  the  sample  is  hereby  confirmed  since  the  sample  is 
representative  and  was  selected  in  full  compliance  with  Article  17  of  the  basic 
Regulation. 

4.3. 

Sampling of Community importers 

(34)  Based  on  the  information  available,  139  importers  were  contacted.  22  unrelated 
importers replied to the sampling form, out of which 21 agreed to be included in the 
sample. According to the data they submitted, these 21 importers accounted for 12 % 
of imports of the product under review from the PRC and 40% of those imports from 
Vietnam (in the RIP). 

(35)  The five largest importers (Clarks, Puma, Adidas, Nike and Timberland) accounted for 
about 18% of the imports concerned as they all reported significant imports from both 
countries. It was therefore considered that a sample composed of these five companies 
would be representative within the meaning of Article 17(1) of the basic Regulation, 
i.e. in terms of volume of imports.  

(36)  However,  in  order  to  better  reflect  the  geographical  spread  of  importers  and  the 
differences  in  the  types  of  footwear  types  imported,  three  other  importers  were 
selected in addition. In this respect, from the sampling returns it appeared that many of 
the  importers  that  replied  operated  on  a  much  smaller  scale  in  terms  of  volume  and 
they imported less known/fashionable brand shoes or higher value shoes. The business 
model and traded product segments of these smaller importers appeared to be distinct 
from the largest importers and these smaller importers could altogether account for an 

EN 

11 

   EN 

 
important  share  of  the  imports  concerned.  It  was  therefore  considered  important  to 
have these importers also represented, as these companies' economic reality might be 
different from those of the large importers mentioned in recital (35) above. 

(37)  On these grounds, a sample of eight importers including the five largest importers and 
three smaller importers was selected. They represent around 10 % of imports from the 
PRC and around 34 % of imports from Vietnam. 

(38)  All  co-operating  importers  which  had  indicated  their  willingness  to  cooperate  were 
given an opportunity to comment on the selection of the sample. Questionnaires were 
sent for completion to the sampled companies. Seven of the sampled importers replied 
within  the  given  deadlines.  In  view  of  its  non-cooperation,  the  eighth  sampled 
importer eventually had to be excluded from the sample. 

5. 

Verification of information received 

(39)  The Commission sought and verified all the information it deemed necessary for the 
purpose  of  the  determination  of  the  continuation  or  likelihood  of  recurrence  of 
dumping  and  injury  and  the  Community  interest.  Information  submitted  by  the 
following companies was verified on-spot: 

5.1.  Exporting producers in the People's Republic of China 

– 

Yue Yuen Industrial (Holdings) Ltd., Hong Kong 

Production company: 

Zhongshan Pou Yuen Manufactory, Guandong Province 

Trading companies: 

Idea Co. Ltd, Macao 

The Look Co. Ltd, Macao 

Gold Plenty Co. Ltd, Macao 

– 

– 

– 

– 

– 

– 

Guangzhou Panyu Pegasus Footwear Co. Ltd., Guangdong Province 

HuaJian Industrial (Holding) Co. Ltd., Hong Kong and its production company 
Dongguan HuaBao Shoes Co. Ltd, Guandong Province 

Zhejiang Aokang Shoes Co. Ltd., Zhejiang Province 

Foshan City Nanhai Golden Step Industrial Co. Ltd., Guangdong Province 

Jianle Footwear Industrial Co. Ltd, Fujian Province 

General Footwear/Gentfort Shoes Co.Ltd, Guangdong Province 

5.2.  Exporting producers in Vietnam 

– 

Pou Yuen Industrial Holdings Limited, Hong Kong 

EN 

12 

   EN 

 
 
 
 
 
 
 
Production companies: 

Pouyuen Vietnam Company Limited, Ho Chi Minh City 

Pou Sung Vietnam Company Limited, Dong Nai Province 

Pou Chen Vietnam Enterprise Company Limited, Dong Nai Province 

Trading companies: 

Betsey Trading Limited 

Sinnamon Trading Limited 

Sky High Trading Limited 

Fitbest Enterprises Limited 

– 

– 

Golden Star Co. Ltd, Haiphong City. 

Shyang Hung Cheng Industrials Co Ltd, Binh Duong Province 

5.3.  Community Industry Producers and national associations of producers 

– 

– 

– 

– 

– 

– 

– 

– 

Associação  Portuguesa  dos  Industriais  de  Calçado,  Componentes,  Artigos  de 
Pele e seus Sucedâneos (APICCAPS) (Portugal) 

Federación de Industrias del Calzado Español (FICE) Spain 

Associazione Nazionale Calzaturifici Italiani (ITALY) 

British Footwear Association LTd (Great Britain) 

Fachverband der Lederverarbeitenden Industrie (Austria) 

Fédération Française de la Chaussure (France) 

HDS Hauptverband der Deutschen Schuhindustrie e.V. (Germany) 

Polish Chamber of Shoe and Leather industry (Poland) 

(40)  Verification visits were also carried out at the premises of the 8 sampled Community 
producers,  located  in  four  different  Member  States.  As  was  the  case  in  the  original 
investigation  the  sampled  Community  producers  as  well  as  other  cooperating 
Community producers requested, on the grounds of the provisions of Article 19 of the 
basic  Regulation  that  their  identities  be  kept  confidential.  They  claimed  that  the 
disclosure of their identity could lead to a risk of significant adverse effects. Certain 
complainant  Community  producers  supply  customers  in  the  Community  that  also 
source their products from the PRC and Vietnam, thus benefiting directly from these 
imports. Those complainants are therefore in a sensitive position since some of their 
clients  may  have  evident  reasons  to  oppose  their  lodging  or  supporting  a  complaint 
against alleged injurious dumping. For these reasons they considered that there was a 

EN 

13 

   EN 

 
risk of retaliation by some of their clients, including the possible termination of their 
business relationship. The request was granted as it was sufficiently substantiated.  

(41)  The  representatives  of  certain  exporting  producers  as  well  as  unrelated  importers 
claimed  that  they  could  not  properly  exercise  their  right  of  defence  because  the 
identity  of  the  complainants  had  not  been  disclosed.  They  argued  that,  in  those 
circumstances, they could not verify that the companies included in the sample were 
truly  representative.  In  the  alternative,  these  parties  held  that  should  confidentiality 
nevertheless be warranted, full disclosure of the individual company figures should in 
such case be given. 

(42) 

In this context it is recalled that the production volume of the sample, broken down by 
countries, was made available for inspection to all interested parties. As concerns the 
argument that all information but for the identity of the company should be disclosed it 
should be noted that such disclosure could indirectly reveal the identity of the sampled 
company. The usual practice of disclosure of non limited versions of the questionnaire 
responses was therefore maintained (i.e. containing indexed data) also in this case. In 
view  of  the  foregoing  it  must  be  concluded  that  the  right  of  defence  of  parties  was 
adequately preserved and the claim was therefore rejected.  

5.4.  Unrelated importers  

– 

– 

– 

– 

– 

– 

– 

Achten Beheer BV, Waalwijk, The Netherlands 

Adidas AG, Herzogenaurach, Germany 

C&J Clark’s International Limited, Street, Somerset, United Kingdom 

Footex International BV, Hazerswoude-dorp, The Netherlands 

Nike European Operations BV, Laakdal, Belgium 

Puma AG Rudolf Dassler Sport, Herzogenaurach, Germany 

Timberland Europe BV, Enschede, The Netherlands 

5.5.  Producers in the analogue market  

– 

Henrich & Cia Ltda, Dois Irmãos, Brazil 

–  Werner Calçados Ltda, Très Coroas, Brazil 

– 

Industria de Calçados West Coast Ltda, Ivoti, Brazil 

6. 

Rights of parties 

(43)  Certain  parties  raised  objections  throughout  the  proceeding  concerning  alleged 
impairment  of  their  rights  of  defence.  They  claimed  that,  as  regards  the  sampled 
Community  producers,  the  information  contained  in  the  file  open  for  inspection  by 
interested parties was incomplete and not provided on time.  

EN 

14 

   EN 

 
(44) 

In  this  respect  it  should  be  underlined  that  a  version  of  a  party's  response  for 
inspection by interested parties (an 'open response') was provided by all the sampled 
companies  without  undue  delays  and  in  line  with  the  time  limits  accorded  to  other 
parties in the investigation. When an open response is submitted to the Commission, it 
may  however  only  be  inserted  in  the  open  file,  once  possible  confidentiality  issues 
have been resolved as provided for under article 19 of the basic Regulation. It has also 
to  be  noted  that  the  Commission  has  a  duty  to  insert  information  in  the  open  file  in 
good time for parties to exercise their rights. This duty has been duly fulfilled in this 
case.  

(45)  As  regards  the  completeness  of  the  open  responses,  it  should  be  noted  that  it  is  a 
normal  part  of  investigations  that  parties  make  additional  submissions  over  time  in 
which  they  provide  additional  information.  These  are  added  to  the  non-confidential 
file  as  soon  as  any  confidentiality  issues  are  resolved.  This  process,  whereby  the 
contributions made by all interested parties are progressively integrated into the body 
of  evidence  used  to  arrive  at  findings  and  into  the  non-confidential  file,  can  not  be 
confused with files being incomplete. 

(46)  Given  the  complexity  of  this  case,  parties'  access  was  facilitated  as  follows.  Firstly, 
electronic  access  was  afforded  to  interested  parties,  whereby  they  could  obtain  upon 
request a full copy of all documents on file on a CD-ROM. In addition, the electronic 
documents were accompanied by a clear index allowing (i) for easy access to the many 
documents  presented  in  this  case  and  (ii)  for  a  dated  record  of  documents  on  file. 
Furthermore,  a  series  of  notes  for  the  file  inserted  into  the  open  file  responded  to 
queries which might have an impact on the rights of defence of parties.  

(47)  The  foregoing  allowed  parties  to  have  enhanced  access  and  to  make  extensive 
comments 
the 
Commission  as  appropriate.  The  claims  as  concerns  the  lack  of  completeness  and 
timeliness of the open file made by the various parties must therefore be rejected.  

investigation,  which  were 

then  addressed  by 

throughout 

the 

(48)  One  interested  party  also  claimed  that  the  Commission  had  discriminated  importers 
and  exporters  by  offering  more  favourable  treatment  to  the  complaining  Community 
producers  in  the  investigation.  In  particular  it  was  claimed  that  importers  and 
exporters, unlike producers were not afforded confidentiality. It was also claimed that 
the complainants were given more favourable treatment as they were not requested to 
submit sample forms at the initiation of the proceeding and that too much flexibility as 
concerned deadline and standard of responses were given to the complainant while an 
exporter  in  the  same  situation  would  have  been  assessed  on  the  basis  of  best  facts 
available under article 18 of the basic Regulation.  

(49) 

In this context it should be noted that the granting of confidentiality to the identity of 
the  Community  producers  supporting  the  complaint  was  based  on  a  duly  motivated 
request  in  accordance  with  article  19  of  the  basic  Regulation.  No  such  request  was 
submitted  by  exporters  or  by  importers  nor  did  any  events  occur  or  any  information 
come  to  the  fore  in  the  course  of  the  investigation  suggesting  that  the  interests  of 
exporters or importers would be impaired as a consequence of the disclosure of their 
identity.  Considering  that  the  situation  of  the  Community  producers  in  this  context 
was  fundamentally  different  from  that  of  the  exporters  and  importers,  the  claim  of 
discrimination cannot be sustained. 

EN 

15 

   EN 

 
(50)  As  concerns  the  selection  of  the  sample,  it  is  referred  to  recital  (19)  above.  The 
situation for exporters and importers was quite different from that of the complaining 
producers, as no detailed information was on file regarding the former. Therefore, the 
completion  of  the  sample  form  was  a  necessity  both  in  order  to  verify  the  parties' 
willingness  to  cooperate  but also in  order to obtain the basic  information needed for 
the selection of the sample. Thus the claim of discrimination has to be rejected. 

(51)  As  concerns  the  flexibility  afforded  to  Community  producers  in  the  context  of 
information collected through questionnaires in the scope of the investigation and the 
use  of  article  18  of  the  basic  Regulation  it  should  be  noted  that  considering  that  the 
same  approach  was  consistently  used  for  exporters  and  importers  as  well  as  for 
Community producers, there could be no grounds for any claim of discrimination. The 
unsubstantiated allegation is thus rejected. 

(52)  With regard to the choice of the analogue country, some parties submitted that short 
deadlines, timing and mode of transmission of the questionnaires discriminated Indian 
and Indonesian companies. In this respect it is noted that the sending of questionnaires 
to India and Indonesia could only be completed at the end of December 2008, after the 
relevant  addresses  of  producers  were  obtained.  The  Commission  made  sure  that 
companies  in  these  countries  were  given  the  same  time  for  replying  as  the  ones  in 
Brazil. Regarding the actual transmission of the questionnaires, the Commission used 
registered mail in all cases, as well as e-mail whenever possible. Therefore the above 
claims have to be rejected. 

(53)  Some parties claimed that information regarding the analogue country was put on the 
open file with undue delays and that this constituted an impairment of their rights of 
defence. The Commission notes that in the present investigation, most of the first non-
confidential replies to the questionnaires by companies in the analogue country were 
found  to  be  deficient,  and  therefore  new,  appropriate  open  versions  had  to  be 
requested. Once received, they were put on the open file without undue delays. In the 
meantime,  the  Commission  included  in  the  open  file  summary  information  on  the 
companies  consulted  and  the  replies  received.  These  claims  therefore  have  to  be 
rejected. 

B. PRODUCT CONCERNED AND LIKE PRODUCT  

1. 

Product concerned 

(54)  The product concerned by this review is the same as the product defined in the original 
Regulation,  i.e.  certain  footwear  with  uppers  of  leather  or  composition  leather, 
excluding  sports  footwear,  footwear  involving  special  technology,  slippers  and  other 
indoor  footwear  and  footwear  with  a  protective  toe-cap,  originating  in  the  People's 
Republic of China and Vietnam ('the product concerned'), currently falling within CN 
Codes 6403 20 00, ex 6403 51 05, ex 6403 51 11, ex 6403 51 15, ex 6403 51 19, ex 
6403 51 91, ex 6403 51 95, ex 6403 51 99, ex 6403 59 05, ex 6403 59 11, ex 6403 59 
31, ex 6403 59 35, ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, ex 
6403 91 05, ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 
91, ex 6403 91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 05, ex 6403 99 11, ex 
6403 99 31, ex 6403 99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 99 91, ex 6403 99 
93, ex 6403 99 96, ex 6403 99 98 and ex 6405 10 00.  

EN 

16 

   EN 

 
(55)  The  definitions  of  Art  1(2)  of  the  original  Regulation  apply  in  the  present 

investigation. According to those definitions 

‘sports  footwear’  shall  mean  footwear  within  the  meaning  of  subheading  note  1  to 
Chapter 64 of Annex I of Commission Regulation (EC) No 1031/2008; 

‘footwear  involving  special  technology’  shall  mean  footwear  having  a  CIF  price  per 
pair  of  not  less  than  EUR  7.5,  for  use  in  sporting  activities,  with  a  single-  or  multi-
layer  moulded  sole,  not  injected,  manufactured  from  synthetic  materials  specially 
designed  to  absorb  the  impact  of  vertical  or  lateral  movements  and  with  technical 
features such as hermetic pads containing gas or fluid, mechanical components which 
absorb  or  neutralise  impact,  or  materials  such  as  low-density  polymers  and  falling 
within  CN  codes  ex  6403  91  11,  ex  6403  91  13,  ex  6403  91  16,  ex  6403  91  18,  ex 
6403 91 91, ex 6403 91 93, ex 6403 91 96, ex 6403 91 98,  

ex 6403 99 91, ex 6403 99 93, ex 6403 99 96, ex 6403 99 98, 

‘footwear  with  a  protective  toecap’  shall  mean  footwear  incorporating  a  protective 
toecap with an impact resistance of at least 100 joules (1) and falling within CN codes: 
CN codes: ex 6403 51 05, ex 6403 51 11, ex 6403 51 15, ex 6403 51 19, ex 6403 51 
91, ex 6403 51 95, ex 6403 51 99, ex 6403 59 05, ex 6403 59 11, ex 6403 59 31, ex 
6403 59 35, ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, ex 6403 91 
05, ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 91, ex 
6403 91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 05, ex 6403 99 11, ex 6403 99 
31, ex 6403 99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 99 91, ex 6403 99 93, ex 
6403 99 96, ex 6403 99 98 and ex 6405 10 00; 

‘slippers and other indoor footwear’ shall mean such footwear falling within CN code 
ex 6405 10 00. 

2. 

Like product 

(56)  The  like  product  subject  to  the  present  expiry  review  is,  as  defined  in  the  original 
investigation,  certain footwear with uppers of leather, whether  produced  and sold  on 
the domestic market, in the analogue market, and/or exported to the Community from 
the PRC and Vietnam. 

2.1.  Product comparability 

(57)  Certain parties argued that the like product sold in the Community was not comparable 
to the product concerned exported from the PRC and Vietnam. It was found however 
that the product sold in the Community (in this review) was comparable to the product 
concerned exported from the countries concerned. In particular, it was found that the 
physical and technical characteristics and uses, as well as the channels of distribution 
of  the  product  concerned  were  similar  and  have  not  changed  since  the  original 
investigation. This argument was therefore rejected. 

(58)  Certain parties also argued that the system used to compare product types sold by the 
various co-operators in the investigation was inappropriate because it was not specific 
enough  to  guarantee  a  fair  comparison.  However,  the  system  used  (PCN  system) 
allowed  for  the  comparison  of  up  to  600  different  categories  or  product  types 

EN 

17 

   EN 

 
 
 
 
 
 
 
 
 
 
organised into five main criteria, namely style of footwear, type of consumer, type of 
footwear,  material  of  outer  sole  and  presence  of  lining.  Moreover,  this  PCN  system 
was already used in the previous investigation. No substantiated reasons have been put 
forward to show why it should be amended. Therefore the same PCN system that was 
used  in  the  original  investigation  was  applied  in  the  present  expiry  review 
investigation. This argument was therefore rejected. 

(59)  Certain parties alleged that the Commission changed its methodology as compared to 
the original case by changing the definition of the product control numbers (PCN's) in 
the course of the investigation. This allegation is however not correct. Rather, in the 
course  of  the  investigation,  it  became  apparent  that  certain  parties  had  wrongly 
interpreted and applied the PCN structure for certain product types. In order to ensure 
a consistent approach, the footwear models in question were therefore re-classified and 
attributed  to  the  proper  PCN  heading  wherever  this  was  found  necessary.  Thus, 
wherever  the  Commission  identified  inaccurate  information  given  by  the  parties 
concerned it had to rectify this. Such rectification can therefore neither be considered 
as a change in methodology, nor as a change of content of the PCN. On the contrary, 
the  need  to  respect  the  PCN  methodology  was  the  very  reason  why  the  rectification 
had to be carried out. Therefore the argument had to be rejected. 

2.2.  Requests for exclusions 

(60)  Several  interested  parties  made  claims  similar  to  those  received  in  the  original 
investigation. They argued that certain types of footwear, within the scope of the like 
product,  e.g.  hiking  shoes,  bowling  shoes,  white  water  canoeing  shoes,  special 
technology  shoes,  horse  riding  shoes  and  special  sizes  shoes,  were  too  different  to 
belong to the same category. A further claim was that the value threshold of 7.5 EUR 
per pair applicable to STAF shoes should be reduced. It is recalled that in the original 
investigation this value threshold had been reduced from 9 EUR to 7.5 EUR per pair.  

(61) 

In  this  respect,  an  expiry  review  does  not  allow  for  a  change  in  the  scope  of  the 
product under measures. Such change could be considered if a party were to make a 
substantiated request under Article 11(3) of the basic Regulation. Therefore the above 
claims had to be rejected.  

C. LIKELIHOOD OF A CONTINUATION OR RECURRENCE OF DUMPING  

1. 

General  

(62) 

In  accordance  with  Article  11(2)  of  the  basic  Regulation,  it  was  examined  whether 
dumping  was  likely  to  continue  or  recur  upon  a  possible  expiry  of  the  measures  in 
force against the PRC and Vietnam. 

(63)  The volumes and prices of imports from the two countries concerned have developed 
as shown in the table below. Chinese imports were subject to quotas until 1 January 
2005  and  imports  increased  substantially  after  this  date  and  were  at  high  levels  in 
2006.  In  2007  and  in  the  RIP  import  volumes  have  stabilised  after  a  decrease 
compared  to  2006.  As  a  result  of  the  anti-circumvention  investigation  the  measures 
were  extended  to  the  imports  of  Macao  SAR  which  were  subject  to  registration  as 
from September 2007.  

EN 

18 

   EN 

 
(64) 

Imports  from  Vietnam  were  not  subject  to  the  quotas  and  were  at  high  levels  in  the 
OIP. Imports volumes then decreased up to 2007 before rising again in the RIP. 

(65)  These  figures  show  that,  contrary  to  the  arguments  made  by  some  interested  parties, 
imports  from  the  countries  concerned  remained  at  high  levels  in  the  RIP.  Their 
combined  market  share  in  the  RIP  is  28.7%  and  is  thus  significantly  higher  than  the 
levels  seen  in  the  OIP  (23.2%).  Although  their  respective  market  shares  have 
fluctuated  since  the  OIP,  they  remained  overall  substantial,  as  each  of  the  countries 
had more than 10% market share in the RIP. 

(66)  Based  on  Eurostat  figures,  the  average  import  prices  from  both  countries  concerned 
rose  between  the  OIP  and  2006.  Since  then,  prices  have  stabilised  for  the  PRC  and 
fallen for Vietnam.  

(67)  As Eurostat data are necessarily general and, while covering the product concerned, do 
not  give  indications  of  possible  changes  in  product  mix,  an  analysis  was  therefore 
undertaken to examine price trends of the seven sampled companies for the PRC and 
the three sampled companies for Vietnam. Overall, for the sampled companies in the 
two countries, it was found that prices of imports decreased over the period from 2006 
to the RIP.  

Table 1 
Total import volumes and values from countries under investigation 

Volume (1000 pairs) 
China  
Market share 
Vietnam 
Market share 
Values (Euro) 
China (Eurostat) 
Vietnam (Eurostat) 

O IP 

2005 

2006 

2007 

RIP 

 63 403  
8.8% 
102 625  

 183 568  
22.9% 

 157 560  
21.6% 

 123 016  
17.8% 

100 619  

79 427  

62 503  

14.2% 

12.6% 

11.0% 

9.1% 

 125 052  
18.5% 
68 852  
10.2% 

7.2 
9.2 

7.5 
9.5 

8.4 
10.2 

8.4 
9.7 

8.5 
9.5 

Source - Comext adjusted as necessary using statistics available to the Commission to exclude products which 
are not the product concerned. 

Table 2 
Total import volumes and values of sampled companies 

O IP 

2005 

2006 

2007 

RIP 

Volume (1000 pairs) 
China (sample) 
Market share 
Vietnam (sample) 
Market share 
Values (Euro) 
China (sample) 
Vietnam (sample) 

EN 

n.a. 

n.a. 

 n.a.  

 n.a.  

n.a. 
n.a. 

n.a. 
n.a. 

19 

11 381  
1.5% 
14 400  
2% 

12.6 
11.4 

12 787  
1.8% 
15 250  
2.2% 

10.7 
10.8 

13 759  
2.0% 
14 500  
2.2% 

10.3 
10.6 

   EN 

 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
2. 

Dumping of Chinese and Vietnamese imports during the RIP 

2.1.  Normal value 

2.1.1.  Analogue country  

(68)  According to Article 2(7) of the basic Regulation, in case of imports from non-market-
economy  countries  and  to  the  extent  that  MET  could  not  be  granted,  for  countries 
specified in Article 2(7)(b) of the basic Regulation, normal value has to be established 
on the basis of the price or constructed value in an appropriate market economy third 
country. 

(69)  For  the  purpose  of  establishing  normal  value  for  the  PRC  and  Vietnam,  the 
Commission indicated in the Notice of initiation its intention to use Brazil as analogue 
country  which  was  used  as  an  appropriate  analogue  country  in  the  original 
investigation. The Commission invited the interested parties to comment thereon. 

(70)  Comments  were  received  from  several  categories  of  interested  parties,  such  as 
complainants, cooperating exporting producers, their representative associations, their 
national  authorities  as  well  as  representatives  of  importers  suggesting  that  Thailand, 
India  or  Indonesia  would  be  a  more  suitable  analogue  country  than  Brazil.  The 
Commission  examined  these  proposals  in  the  light  of  the  criteria  applied  for  the 
analogue country selection. 

(71) 

In this respect, the Commission established that the market size for leather footwear in 
the RIP could be estimated at 189 million pairs for Brazil, 800 million pairs for India, 
109 million for Indonesia and only 6 million for Thailand. In view of the very small 
size of the Thai market and the availability of other options, the Commission did not 
further investigate Thailand as a potential analogue country. 

(72)  Consequently,  the  Commission  sought  co-operation  from  footwear  producers  in 
Brazil, India and Indonesia, following the requests of the parties. Questionnaires were 
sent to companies in the three countries and meaningful responses were received from 
five Brazilian, one Indian and five Indonesian producers.  

Representativeness of domestic sales and product range 

(73)  The Commission examined the representativeness of the companies that responded as 

regards their domestic sales  

(74)  As  regards  Brazil,  the  three  investigated  companies  had  domestic  sales  of  the  like 
product  in  the  investigation  period  representing  around  17%  of  Chinese  and  around 
19% of Vietnamese sampled exports.  

(75)  As regards India, only one company came forward, which reported domestic sales of 
the  like  product  in  the  investigation  period  representing  around  5%  of  Chinese  and 
around 6% of Vietnamese sampled exports.  

(76)  As  regards  Indonesia,  the  five  cooperating  companies  had  domestic  sales  of  the  like 
product  representing  around  2%  of  Chinese  and  around  2%  of  Vietnamese  sampled 
exports.  

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(77)  Brazil was thus the country with the most representative volume of domestic sales in 

the investigation period. 

(78)  The Commission subsequently examined how many footwear types in respect to those 
exported  by  China  and  Vietnam  were  covered  by  the  domestic  sales  in  the  three 
countries concerned.  

(79)  Domestic sales of the co-operating Brazilian and Indonesian producers covered in the 
RIP  a  wide  product  range,  matching  a  significant  number  of  PCNs  exported  from 
China  and  Vietnam.  In  the  case  of  India,  the  sole  co-operating  producer  reported 
domestic sales in the RIP matching only 1 PCN exported by China and Vietnam. 

Competition in the potential analogue countries 

(80)  According to the data collected by the Commission, all three countries examined have 
an  important  number  of  producers  which  ensures  that  there  is  a  high  level  of 
competition between domestic operators on their respective markets. Brazil has some 
7,800  leather  footwear  producers,  1,500  of  which  can  be  considered  of  a  size 
sufficiently  comparable  to  Chinese/Vietnamese  companies.  India  is  reported  to  have 
some 3,000 producers. For Indonesia, the number of producers is estimated to be 212. 
The  three  countries  have  substantial  exports  (estimated  around  64  million  pairs  for 
Brazil, 67 million for India and 27 million for Indonesia). Brazil was found to have a 
higher domestic  consumption  of  leather shoes per  capita  (1) compared to India  (0.7) 
and Indonesia (0.5). 

(81)  As  regards  imports  into  the  countries  examined,  they  reached  in  the  RIP  a  market 

share of ±2% in Brazil, ±1% in India and ±1.5% in Indonesia.  

(82)  Based  on  the  above  elements,  the  Commission  considered  that  Brazil  was  the  most 
suitable choice of analogue country. In particular, Brazil was found to have the most 
representative  volume  of  domestic  sales  in  footwear  with  uppers  of  leather.  In 
addition,  Brazilian  cooperating  companies  produce  a  wide  range  of  products, largely 
matching  those  of  China  and  Vietnam.  Indonesian  cooperating  producers,  who  had 
also a wide range of products, had much lower domestic sales, while Indian domestic 
sales, although at substantial volumes, were of a very limited range. 

Comments by interested parties 

Product comparability 

(83)  Several parties claimed that Brazil should not be used as analogue market, because it 
specialises only in women's footwear. They argued that this could be demonstrated by 
the questionnaire replies of  the Brazilian cooperating  companies and by the fact that 
Brazil exports mostly women's shoes.  

(84)  However,  the  investigation  showed  that  more  than  half  of  the  total  domestic  sales 
reported  by  the  cooperating  Brazilian  companies  were  men's'  shoes.  During  the 
verification visits the Commission made to the Brazilian producers, it was found that 
while the two smaller companies were indeed more specialised in women's footwear, 
the largest one sold predominantly men's footwear on the domestic market. Domestic 
market  sales  were  hence  made  in  sufficient  quantities  for  women's  as  well  as  men's 
footwear  types.  As  regards  the  argument  that  Brazil’s  exports  are  mainly  women’s 

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footwear,  the  Commission  does  not  consider  that  the  pattern  of  a  country's  exports 
necessarily corresponds to that of products sold on its domestic market.  

(85)  Some parties submitted that questionnaire responses showed that Brazil specialises in 
sandals  which  therefore  cannot  be  compared  to  the  footwear  types  exported  from 
China and Vietnam, which cover a larger variety. The examination by the Commission 
did not confirm this claim, but showed that Brazilian producers sold a wide range of 
footwear  types,  which  translated  at  PCN-level  into  a  more  than  50%  matching  rate 
with the models exported by the Chinese and Vietnamese companies in the samples.  

(86)  Some  parties  argued  that  Brazil  could  not  be  used  as  analogue  country  for  children 
footwear,  because  it  has  a  very  small  production  of  this  type  of  shoes.  The 
Commission notes that it is not unusual that an analogue country does not produce all 
sub-types of the like product. However, this does not prevent that a fair comparison of 
normal value can be established by making proper adjustments for this type. As indeed 
none  of  the  Brazilian  cooperating  producers  manufactured  children's  footwear,  the 
normal  value  for  this  type  was  calculated,  as  in  the  original  investigation,  by 
appropriately  adjusting  the  normal  value  calculated  for  adults'  shoes.  It  is  therefore 
concluded  that  Brazil  could  be  used  as  analogue  country  for  all  types  of  leather 
footwear, including children's shoes.  

(87)  Some parties submitted that footwear produced in Brazil uses high quality leather and 
has  therefore  higher  prices  than  China  and  Vietnam.  It  would  therefore  not  be 
comparable to the footwear originating in the two countries under investigation. Some 
other interested party on the contrary submitted that the Brazilian prices needed to be 
properly adjusted because the leather of Brazilian footwear was of lower quality than 
the  leather  used  in  China  and  Vietnam.  The  Commission  examined  this  matter  and 
found that in terms of prices and quality there was no difference in the leather used for 
footwear  produced  in  Brazil  and  that  used  for  footwear  produced  in  China  and 
Vietnam.  It  is  recalled  in  this  context  that  an  adjustment  to  the  normal  value  was 
applied  in  the  original  case,  because  leather  used  by  the  Brazilian  analogue  country 
producers was found to be of lower quality and sold at lower prices as compared to the 
leather  used  by  the  sampled  producers  in  the  export  countries.  In  the  current  review 
investigation,  producers  in  Brazil  (and  most  producers  in  the  export  countries)  are 
different  from  those  that  co-operated  with  the  original  investigation.  In  turn,  the 
different mix in companies resulted in different leather input costs. 

(88)  Some  parties  expressed  the  view  that  Brazilian  and  Vietnamese  products  are  not 
comparable,  arguing  that  Brazil  exports expensive  high-end  footwear  while  Vietnam 
exports  low-priced  products,  but  did  not  submit  substantiating  evidence  on  this.  The 
Commission notes that in any event Vietnamese products would have to be compared 
to products sold on the Brazilian domestic market, not to those exported from Brazil. 
The Commission did not find any evidence that the footwear originating in Vietnam or 
sold in Brazil was limited to a specific market segment. 

Competition on the Brazilian market 

(89)  Some parties submitted that Brazil had increased its tariffs on footwear from 20% to 
35% as of January 2008 and argued that this rendered Brazil a highly protected market 
with reduced competition. They also argued that the market share held by imports in 
Brazil  was  too  low  with  respect  to  consumption.  The  Commission  examined  these 

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claims.  It  was  found  that  Brazil  indeed  raised  its  tariffs  from  20%  to  35%  in  the 
beginning of 2008, i.e. in the middle of the RIP. However, the Commission also found 
that the value of the Brazilian currency vis-à-vis the US Dollar increased significantly 
over the RIP, and particularly after the tariff increase was introduced by Brazil. More 
precisely,  the  value  of  the  Brazilian  Real  strengthened  by  up  to  19%  (i.e.  a  greater 
increase  than  the  increase  in  tariffs)  compared  to  the  beginning  of  the  RIP.  As  a 
consequence,  the  rise  in  the  value  of  the  Brazilian  currency  with  respect  to  the  US 
Dollar offset to a large extent the effect of the tariff rise on import prices. Moreover, 
the  Commission  did  not  find  any  evidence  that  the  raise  in  tariffs  was  reflected  in  a 
substantial  increase  of  domestic  prices,  nor  that  it  hindered  imports.  In  fact,  the 
Commission established that, despite the tariff increase, imports of leather shoes into 
Brazil  in  the  first  half  of  2008  (i.e.  after  the  tariff  rise)  increased  considerably  as 
compared  to  the  first  half  of  2007.  Thus,  there  was  no  effective  impact  of  the  tariff 
increase on the Brazilian market.  

(90)  Some parties submitted that Brazil is not an open market for footwear because imports 
of  footwear  into  the  country  are  hampered  by  non-automatic  licensing.  The 
Commission found that Brazil applies non-automatic licensing on imports of footwear, 
but notes this does not appear to have constituted a barrier to imports in view of the 
aforementioned  import  increase.  In  addition,  the  Commission  established  that 
Indonesia  also  applies  non-automatic  licensing  regarding  imports  of  footwear.  The 
Commission notes that non-automatic import licensing is a WTO compatible practice. 
The  Commission  therefore  concludes  that  there  exist  no  grounds  for  regarding  the 
non-automatic import licenses applied by Brazil as an import restriction which could 
lead to a conclusion that Brazil is a non-open market.  

(91)  Some parties argued that the significant rise in the value of the Brazilian Real in the 
recent years affected competitiveness in Brazil negatively, or that a drop of the Real by 
25%  since  the  RIP  affected  Brazil's  international  competitiveness  negatively.  These 
arguments  were  not  supported  by  substantiating  evidence,  but  in  any  event, 
developments  after  the  RIP  cannot  be  considered  pertinent  in  the  choice  of  the 
analogue country.  

(92)  Following the above, the Commission found no evidence that the overall conditions of 
competition  on  the  Brazilian  market  have  changed  significantly  since  the  original 
investigation so as to make Brazil unsuitable as an analogue country. 

Differences in socio-economic development  

(93) 

(94) 

It was argued by several parties that India or Indonesia are more appropriate choices 
for  an  analogue  market,  because  Brazil  does  not  possess  similarities  to  China  and 
Vietnam in terms of economic development, or per capita GNP. 

It should be noted that by definition, a non-market-economy country or an economy in 
transition  does  not  have  the  same  economic  characteristics  as  a  market-economy 
country. It is not unusual that such difference in economic development exists between 
an analogue country and a non-market-economy country or an economy in transition. 
This applies also to the difference in income per capita which is also an indicator of 
economic  development.  This,  however,  does  not  prevent  Brazil  to  be  chosen  as 
analogue  country  as  long  as  it  is  deemed  more  appropriate  with  regard  to  the  other 
factors taken into consideration. 

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Differences in cost structure 

(95)  Several interested parties stressed the fact that labour costs are higher in Brazil than in 
Vietnam and China and that India, Indonesia or Thailand whose labour costs are more 
comparable  and  which  would  thus  be  more  appropriate  analogue  countries.  It  was 
submitted  that  due  to  higher  wages,  labour  costs  in  Brazil  amount  to  50-70%  of  the 
cost of production as opposed to 30% in China.  

(96) 

(97) 

In that respect, a country with a different level of economic development may indeed 
be chosen as analogue country for a non-market-economy country or an economy in 
transition.  Similarly,  labour  costs  which  are  an  indicator  for  the  economic 
development of a country cannot be considered as a relevant criterion in isolation. In 
any  event,  as  regards  the  part  of  labour  cost  in  the  overall  cost  of  production,  the 
Commission established at the verification on site that labour costs in Brazil are less 
than  40%  of  the  total  production  cost  and  therefore  much  closer  to  the  relevant 
Chinese level than alleged. 

It  was  also  argued  by  several  parties  that  Brazil  is  not  appropriate  for  establishing 
normal  value,  because  Brazilian  companies  bear  costs  for  design  and  research  and 
development,  which  in  the  case  of  China  and  Vietnam  are  at  the  expense  of  their 
customers abroad. The Commission found that this difference in cost structure may be 
plausible,  since  exporters  in  the  countries  concerned  sold  the  product  concerned  to 
former Community manufacturers in the EC which still support the above mentioned 
components of the cost of production and sell the product under their own brand name. 
However,  this  is  not  a  reason  to  reject  Brazil  as  a  suitable  analogue  country  as 
adjustments  can  be  made  for  such  costs  when  establishing  normal  value  (see  recital 
(118) et seqq.). 

(98)  Some  parties  submitted  that  unlike  China  and  Vietnam  ex-factory  prices  in  Brazil 
include marketing expenses,  special taxes, and credit and delivery costs. In addition, 
overhead costs in Brazil were alleged to be higher, due to the smaller size of Brazilian 
companies.  Here  too,  the  Commission  considers  that  this  is  not  a  reason  to  reject 
Brazil as a suitable analogue country, as adjustments can be made for such allowances 
in the calculation of normal value (see recital (118) et seqq.). 

(99)  Some  parties  alleged  that  Asian  countries  have  better  access  to  raw  materials  than 
Brazil, in particular leather. The Commission examined the documentation submitted. 
It is shown indeed that leather production has progressed faster in Asia, but this has to 
be  seen  in  the  light  of  the  increase  in  Asian  production  of  leather  goods.  Latin 
American  countries  account  for  slightly  more  than  15%  of  the  world  production  of 
leather shoes and close to 15% of the world production of raw leather. Asian countries 
produce more than 50% of leather shoes in the world but less than 40% of the world’s 
raw  leather.  It  can  thus  be  concluded  that,  despite  differences  in  absolute  figures  of 
leather production, Latin American countries have a higher self-sufficiency compared 
to Asian countries and therefore easier access to raw leather. 

Other claims made by parties 

(100)  Some  interested  parties  argued  that  Brazil  is  not  an  appropriate  reference  country, 
because  Brazilian  footwear  is  not  a  substitute  for  Chinese  and  Vietnamese  footwear, 
since  after  the  imposition  of  anti-dumping  duties  by  the  EC,  imports  into  the  EC 

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originating in Brazil did not go up while those from India and Indonesia increased. In 
this  respect,  imports  into  the  EC  from  India  and  Indonesia  did  increase  after  anti-
dumping  duties  were  imposed.  However,  the  Commission  observes  that  commercial 
operators remain free regarding their choice of suppliers, and, as examined later under 
the  injury  analysis,  in  this  case  they  preferred  to  source  their  products  from 
neighbouring  countries  to  China  and  Vietnam.  This  does  not  render  Brazil 
inappropriate as analogue country. Moreover, an analogue country serves to establish 
normal  value.  Whether  or  not  it  exports  to  the  EC  is  not  relevant  for  this  purpose. 
Therefore, this argument was rejected. 

(101)  Some parties argued that Brazil cannot be a comparable market to Vietnam, because 
Vietnam  is  export  oriented  while  Brazil  sells  mainly  domestically.  The  Commission 
cannot accept the relevance of this argument. Vietnam is clearly more export-oriented 
than Brazil however it is not evident how this could affect the normal value calculated 
in Brazil, which by definition relates to Brazilian production costs and domestic sales.  

(102)  Several  parties  raised  the  argument  that  Brazilian  export  prices  are  lower  than  the 
domestic  ones.  For  some  of  the  parties  this  indicates  that  export  prices  rather  than 
domestic ones should be used for establishing normal value. Other parties argued that 
this constitutes evidence that Brazilian exporters are dumping and submit that Brazil 
would therefore be inappropriate as analogue country. First the Commission observes 
that  export  prices  are  not  relevant  in  this  case,  since  sufficiently  representative  and 
profitable  domestic  prices  are  available.  Second,  the  allegation  that  Brazilian  export 
prices are dumped has not been substantiated and in any event cannot be confirmed or 
denied without a proper investigation of this issue.  

(103)  Some  interested  parties  claimed  that  Brazil  is  inappropriate  as  analogue  country 
because Brazilian producers receive government support for exports. The Commission 
first  notes  that  this  kind  of  support  would  affect  primarily  export  prices  which,  as 
mentioned  above,  are  not  relevant  for  the  present  investigation.  The  Commission 
nevertheless  examined  the  evidence  submitted  by  the  parties  and  found  that  the 
support  referred  to  related  to  export  promotion  programmes,  similar  to  the  ones  that 
can  be  found  in  many  other  countries,  with  the  objective  to  make  products  better 
known  abroad,  by  publicity  campaigns  and  participation  in  international  trade  fairs. 
The Commission found no indication that support for export promotion in Brazil was 
benefitting to domestic sales of shoes. 

(104)  Several  parties  raised  the  fact  that  Brazil  has  initiated  an  anti-dumping  investigation 
into footwear originating in China, for which Italy was used as analogue country, and 
claimed that Italian and Brazilian companies colluded to maximise dumping findings 
in the review investigation carried out by the EC. However there was no substantiation 
to these allegations, and no other related evidence. The Commission therefore rejects 
this argument. 

Conclusion as regards the choice of analogue country 

(105)  In light of the above, it was concluded that Brazil was the most appropriate analogue 

country.  

(106)  A  large  number  of  interested  parties  alleged  that  selecting  Brazil  as  the  analogue 
country would be determinant for a finding of dumping and that dumping would not 

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be  found  if  one  of  the  other  countries  was  selected.  For  argument's  sake,  the 
Commission  therefore  checked  what  the  result  would  have  been  if  Indonesia  was 
selected,  which,  although  not  the  best  option  as  demonstrated  above  was  the  only 
tenable alternative to Brazil. 

(107)  The results are given in the relevant section below, and confirmed that the choice of 
analogue  country  in  this  case,  between  the  tenable  options  available,  was  not 
determinative of the results of the dumping calculations. 

(108)  Brazil was therefore selected as the analogue country.  

2.1.2.  Determination of normal value in the analogue country  

(109)  Following the choice of Brazil as an analogue country, normal value was calculated on 

the basis of the data verified at the premises of the co-operating Brazilian producers. 

(110)  The domestic sales of these producers were found to be representative compared to the 
volume  of  exports  to  the  Community  by  the  exporting  producers  in  the  PRC  and 
Vietnam. It was also examined whether the domestic sales could be regarded as having 
been made in the ordinary course of trade, by establishing the proportion of profitable 
sales to independent customers. The investigation showed that the sales at prices equal 
to or above the unit cost represented more than 80 % of the total sales volume of each 
producer. Therefore, the normal value was based on actual domestic prices, calculated 
as a weighted average of the prices of all domestic sales of a product type made during 
the RIP, irrespective of whether these sales were profitable or not. 

2.1.3.  Normal value for Golden Step 

(111)  In  the  case  of  Golden  Step,  the  normal  value  was  determined  on  the  basis  of  the 
company’s own data on domestic sales and cost of production. This data was verified 
at the premises of the company. 

(112)  The Commission first established that Golden Step made no domestic sales during the 
RIP.  Therefore,  normal  value  could  not  be  established  on  the  basis  of  its  domestic 
prices,  as  provided  by  Article  2(1),  subparagraph  1,  of  the  basic  Regulation. 
Accordingly, another method had to be applied. 

(113)  Given that no domestic prices could be used to establish normal value, a constructed 
normal  value  had  to  be  calculated  based  on  the  costs  of  the  producer  in  question. 
Consequently, in accordance  with Article 2(3) of the basic Regulation, normal value 
was  constructed  by  adding  to  the  manufacturing  costs  of  the  exported  shoe  model, 
adjusted where necessary, a reasonable amount for selling, general and administrative 
(‘SG&A’) expenses and a reasonable margin of profit. 

(114)  In this respect, SG&A and profit could not be determined in accordance with Article 
2(6)(a)  of  the  basic  Regulation  on  the  basis  of  actual  amounts  determined  for  other 
exporting  producers  in  the  country  concerned  because  no  other  Chinese  exporting 
producer  had  been  awarded  MET.  Further,  because  Golden  Step  had  not  made  any 
domestic sales of the same general category of products in the country concerned, the 
SG&A  and  profit  could  not  be  established  pursuant  to  Article  2(6)(b)  of  the  basic 
Regulation. Consequently, it had to be determined in accordance with Article 2(6)(c) 
of the basic Regulation, i.e. on the basis of any other reasonable method.  

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(115)  In  this  context,  the  Commission  assessed  SGA  and  profit  rates  along  three  possible 
scenarios.  It  first  established  SGA  and  profits  using  the  data  of  the  original 
investigation.  It  also  considered  SGA  and  profits  from  Chinese  exporting  producers 
that  recently  obtained  MET  in  other  recent  investigations  and  which  had  domestic 
sales  in  the  ordinary  course  of  trade.  In  a  third  scenario,  it  examined  information 
regarding  SG&A  and  profit  found  in  the  analogue  country.  Normal  value  was  then 
assessed along these scenarios.  

2.2.  Chinese and Vietnamese Export Prices  

(116)  Where export sales were made directly to independent customers in the Community, 
the export prices were established on the basis of prices actually paid or payable for 
the product concerned in accordance with Article 2(8) of the basic Regulation. 

(117)  Where export sales to the Community were made through unrelated trading companies 
located  outside  the  Community,  export  prices  were  established  on  the  basis  of  the 
prices of the product when sold for export to the trading companies i.e. to an unrelated 
buyer,  by  the  producers  concerned  in  accordance  with  Article  2(8)  of  the  basic 
Regulation.  

2.3.  Comparison of Chinese and Vietnamese Export Prices with Analogue Country Normal 
Values 

(118)  Following  the  methodology  employed  in  the  original  investigation,  for  exported 
product types not sold on the Brazilian domestic market, the domestic sales prices of 
the  most  closely  resembling  product  types  were  used  in  establishing  normal  values. 
These were appropriately adjusted where warranted.  

(119)  The  normal  value  and  export  prices  were  compared  on  an  ex-works  basis.  For  the 
purpose of ensuring a fair comparison between the normal value and the export price, 
due  allowance  in  the  form  of  adjustments  was  made  for  differences  affecting  prices 
and  price  comparability  in  accordance  with  Article  2(10)  of  the  basic  Regulation.  In 
particular, the following adjustments have been made: 

(120)  It  was  examined  whether  a  level  of  trade  adjustment  under  Article  2(10)(d)  of  the 
basic Regulation was warranted. In that context it was found that the levels of trade in 
the domestic and export markets were different. Accordingly, adjustments were made 
in accordance with Article 2(10)(d)-(i) of the basic Regulation to reflect the discounts 
granted to wholesalers on the Brazilian market, as compared to sales to retailers which 
had solely been made by the three Brazilian producers investigated.  

(121)  In order to ensure a fair comparison between Chinese and Vietnamese exports on the 
one hand and Brazilian domestic sales on the other hand, an allowance was granted in 
accordance  with  Article  2(10)(i)  of  the  basic  Regulation  to  reflect  differences  in 
commissions paid to independent agents in Brazil. 

(122)  According  to  Article  2(10)(k)  of  the  basic  Regulation,  an  allowance  for  R&D  and 
design  was  also  granted  in  order  to  reflect  the  costs  incurred  by  the  Brazilian 
producers as opposed to Chinese/Vietnamese producers. 

(123)  An adjustment pursuant to Article 2(10)(a) of the basic Regulation was also made in 
the  previous  investigation  to  reflect  differences  in  the  quality  of  the  leather  used  to 

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manufacture the footwear. In the current investigation no such adjustment was found 
necessary because of the similar quality of leather used by the Brazilian, Chinese and 
Vietnamese exporters (see recital (87)).  

(124)  Other  adjustments,  including  such  concerning  transport  and  insurance  pursuant  to 
Article 2(10)(e) of the basic Regulation, were made in all cases where they were found 
to be reasonable, accurate and supported by evidence.  

(125)  Certain  interested  parties  argued  that  USD/EUR  exchange  rate  fluctuations  impacted 
on  the  dumping  margins  found  and  warranted  an  adjustment.  This  claim  had  to  be 
rejected. Under Article 2(10)(j) of the basic Regulation such  adjustment  can  only be 
granted  where  a  sustained  movement  in  exchange  rates  has  taken  place.  Where 
exchanges rates fluctuate freely, as is the case for the  USD/EUR rate, they regularly 
move up- and downwards. No sustained movement can be identified in such case and 
accordingly no adjustment can be granted. 

2.4.  Determination of dumping for the companies investigated in the PRC  

2.4.1.  Determination of dumping for Golden Step 

(126)  In the case of Golden Step, the comparison of its export price with the normal value as 
explained in recitals (111) onwards showed a dumping margin in a range between 5% 
and 16%. 

2.4.2.  Determination of dumping for the companies not granted MET  

(127)  Pursuant  to  Article  2(11)  and  (12)  of  the  basic  Regulation,  the  dumping  margin  was 
established  on  the  basis  of  a  comparison  of  a  weighted  average  normal  value  by 
product  type  with  a  weighted  average  export  price  by  product  type.  For  all  sampled 
companies  one  weighted  average  dumping  margin  has  been  calculated  in  the  PRC. 
This dumping margin was attributed to all other exporting producers in the PRC.  

(128)  The country-wide level of dumping for the PRC was established a range between 35% 
and 38% of the CIF Community frontier price, depending on the calculation method 
used for Golden Step as explained in recital (115). 

(129)  In  view  of  what  was  concluded  regarding  the  selection  of  the  analogue  country,  a 
dumping calculation was also performed using the methodology stated above, except 
that  Brazilian  normal  values  were  replaced  by  those  of  the  cooperating  Indonesian 
producers.  This  calculation  resulted  in  a  dumping  margin  ranging  between  19%  and 
22%, depending on the calculation method used for Golden Step. 

2.5.  Determination of dumping for the companies investigated in Vietnam  

(130)  Pursuant  to  Article  2(11)  and  (12)  of  the  basic  Regulation,  the  dumping  margin  was 
established  on  the  basis  of  a  comparison  of  a  weighted  average  normal  value  by 
product type with a weighted average export price by product type. Since none of the 
sampled  companies  had  been  granted  MET,  one  weighted  average  dumping  margin 
has  been  calculated  in  Vietnam.  This  dumping  margin  was  attributed  to  all  other 
exporting producers in Vietnam. 

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(131)  The country-wide level of dumping for Vietnam was established at 43.8 % of the CIF 

Community frontier price. 

(132)  Similarly  to  the  PRC,  a  dumping  calculation  was  also  performed  using  the 
methodology stated above, except that Brazilian normal values were replaced by those 
of  the  cooperating  Indonesian  producers.  This  calculation  resulted  in  a  dumping 
margin of 28.4%.  

2.6.  Conclusion on Continuation of Dumping from the Countries Concerned 

(133)  Certain  interested  parties  argued  that  exports  from  the  countries  concerned  between 
the imposition of definitive measures in April 2006 and the end of the RIP had fallen. 
It was argued that this decrease reflected falls in production and production capacity in 
the PRC and Vietnam which were due to the imposition of the definitive measures, a 
switch in production from the PRC and Vietnam to other countries or increase in their 
domestic  sales.  A  further  claim  was  that  import  prices  had  either  increased  or 
remained  stable.  The  parties  claimed  therefore  that  import  volumes  and  prices  could 
not justify the finding of a continuation of dumping at significant volumes during the 
RIP.  

(134)  These  arguments  do  not  change  the  finding  that  substantial  dumping  margins  were 
found  for  the  RIP  and  that  those  margins  cover  large  volumes  of  imports  with  large 
Community market shares. It was therefore concluded that a continuation of dumping 
has  taken  place  in  respect  of  the  product  concerned  originating  in  the  PRC  and 
Vietnam. 

3. 

Development of imports from the PRC should measures be repealed  

3.1.  General remarks 

(135)  The  likely  development  of  imports  from  the  PRC  was  analysed  in  terms  of  both 

expected prices and volumes.  

(136)  As  a  starting  point  prices  were  established  for  the  RIP.  Data  was  available  from  the 
sampling returns (received from 58 co-operating exporting producers) which contained 
sales prices for the domestic market and export prices both to the Community market 
and  to  third  country  markets.  This  information  was  used  as  it  was  deemed  to  be  the 
best source of price information available for the product concerned for the purpose of 
comparing price indications on various markets. This data was deemed representative 
because  it  covered  22%  of  imports  to  the  Community  market.  Export  prices  to  the 
Community  included  in  the  sampling  returns  were  cross-checked  with  statistical 
information available to the Commission, even if the statistical information could not 
be used for price comparisons as it did not cover Chinese domestic sales and exports 
to third countries. 

(137)  Although Comext based data was another reliable source it did not provide, as already 
explained in recital (67), the possibility of comparing prices on different markets. 

(138)  Prices on the Community market were obtained from Community producers' sampling 
data. The investigation established that these average prices were of comparable types 
to the imported footwear because: 

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– 

– 

– 

– 

they concerned the like product;  

they were at the same level of trade; 

they were at comparable incoterms; 

they involved comparable quantities. 

(139)  The impact of certain new developments since the end of the RIP was also analysed 
because it was considered significant enough to affect the likelihood of continuation of 
dumping. Such analysis was also requested by interested parties. 

3.2.  Relationship between prices in the Community and the PRC 

(140)  Sampling returns indicated that the Chinese domestic prices established on the basis of 
exporters'  own  data  were  lower  than  prices  on  the  Community  market.  It  should, 
however, be noted that the data of all non-sampled companies (including data relating 
to any domestic sales) could not be verified. A detailed analysis of domestic prices in 
the  PRC  could  therefore  not  be  performed.  Moreover,  it  was  not  deemed  necessary, 
given the overall finding of continuation of dumping. 

3.3.  Relationship  between  export  prices  to  third  countries  and  the  price  level  in  the 
Community 

(141)  Sampling  returns  indicated  that  the  prices  achieved  by  the  Chinese  co-operators  on 
major  third  country  markets  were  lower  than  prices  prevailing  on  the  Community 
market. This again indicated that Chinese producers could export larger quantities to 
the Community. Should measures be allowed to lapse it would be more profitable for 
Chinese  exporting  producers  to  redirect  their  exports  to  the  Community.  However, 
these  data  on  prices  achieved  by  the  Chinese  co-operators  on  major  third  markets 
could not be verified and therefore this analysis was not pursued further 

(142)  Certain interested parties claimed that other markets had become more attractive than 
the Community market. To support this claim one party submitted an analysis of the 
Chinese customs statistics. However, the Commission’s analysis has shown that, apart 
from  the  U.S.,  the  Community  market  remains  the  most  attractive  market  for  the 
Chinese  exporters.  In  fact,  exports  increased  over  the  period  covered  by  this  party's 
analysis  (i.e.  2005  to  2008).  Should  the  anti-dumping  duties  be  repealed,  the 
Community market would become even more attractive and volumes would therefore 
likely increase. 

3.4.  Relationship between export prices to third countries and prices in the PRC 

(143)  The sampling returns received from the 58 Chinese co-operating companies show that 
export prices to major third country markets are below the prices they achieve on the 
domestic market. However, these data could not be verified and therefore this analysis 
was not pursued further. 

(144)  In addition the level of the export prices to third countries compared to the Brazilian 
normal  value  indicated  that  those  export  prices  are  generally  substantially  lower. 
However,  again  for  the  reasons  explained  in  recital  (140),  these  data  could  not  be 
verified and therefore this analysis was not pursued further. 

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(145)  In conclusion the available data indicated a likelihood of continuation of dumping. 

3.5.  Unused capacities and stocks 

(146)  All  Chinese  companies  in  the  sample  operated  a  production  to  order  system  and 
therefore  their  stocks  were  of  finished  goods  awaiting  despatch.  The  production  to 
order  system  is  used  because  the  footwear  sector  has  to  adapt  to  new  fashions  each 
season based on orders from customers and cannot use sales from stocks. Therefore, as 
companies  had  no  real  stocks,  that  element  could  not  be  considered  as  a  meaningful 
indicator for the analysis of likelihood of continuation of dumping. 

(147)  The  investigation  established  that  unused  capacities  of  all  58  cooperating  Chinese 
companies accounted for about 9% of their total production capacity of footwear. This 
quantity would correspond to 14.5 million pairs for the 58 co-operators or around 65 
million  pairs  for  all  exporting  producers.  The  latter  figure  is  around  10%  of  total 
Community consumption (as given in table 3). 

(148)  The  likely  use  of  this  spare  capacity  was  analysed.  Given  the  aforementioned 
differences  between  the  price  levels  in  the  Community,  on  the  Chinese  domestic 
market and in third countries, Chinese companies are likely to have an incentive to use 
spare  capacity  for  exports  to  the  Community.  Another  factor,  which  makes  the  EU 
market attractive for the Chinese exporters, is its size.  

(149)  Furthermore, it should be pointed out that the existing assembly lines can be used to 
produce other kinds of footwear such as STAF and shoes with textile uppers as well as 
the  product  concerned.  The  companies  sampled  and  the  other  co-operators  in  China 
produced large quantities of footwear which is not the product concerned. The current 
split between production of the product concerned and other footwear depends on the 
requirements of consumers and the ordering and sourcing policies of the Community 
importers. However should the measures be repealed the Community importers would 
surely  reassess  their  sourcing  policies  and  may  order  a  greater  proportion  of  the 
product  concerned  from  Chinese  producers.  This  could  result  in  an  increase  of  the 
quantities of the product concerned exported to the Community.  

3.6.  Circumvention and absorption practices 

(150)  As  established  by  Regulation  (EC)  No  388/2008,  the  existing  measures  covering  the 
PRC  were  circumvented  by  consignments  through  Macao  SAR.  Subsequently, 
measures were extended to consignments of the product concerned assembled in and 
transhipped  through  Macao  SAR.  Those  circumvention  practices  demonstrate  the 
attractiveness of the Community market for Chinese exporting producers.  

3.7.  Conclusion 

(151)  The  investigation  has  shown  that  should  measures  be  repealed  there  would  be  a 
likelihood of continuation of dumping. This conclusion is based on the attractiveness 
of the Community market in terms of volume as well as on price comparisons between 
the Community, Chinese and third country markets. 

(152)  Furthermore, a number of factors including the relative levels of prices, the availability 
of  spare  capacities,  circumvention  and  the  ability  to  switch  from  the  production  of 
other  footwear  to  the  product  concerned  provide  evidence  for  a  likely  increase  in 

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imported quantities if measures are repealed. On the other hand, other factors such as 
the world economic crisis and a tendency to switch production to other countries will 
inevitably  reduce  imported  quantities  to  some  extent.  These  factors  are  further 
analysed in section 5 (Developments following the RIP) below. 

(153)  It  is  concluded  that  imports  from  the  PRC  will  continue  to  enter  the  Community 
market in large volumes and that such volumes will be sold at low, dumped prices so 
that there is likelihood of continuation of dumping should the measures be allowed to 
lapse. 

4. 

Development of imports from Vietnam should measures be repealed 

4.1.  General 

(154)  The  likely  development  of  imports  from  Vietnam  was  analysed  in  terms  of  both 

expected prices and volumes.  

(155)  As  a  starting  point  prices  were  established  for  the  RIP.  Data  was  available  from  the 
sampling  returns  (received  from  51  co-operating  Vietnamese  exporting  producers) 
which  contained  sales  prices  for  the  domestic  market  and  export  prices  both  to  the 
Community market and to third country markets. This information was used as it was 
deemed  to  be  the  best  source  of  price  information  for  the  product  concerned  for  the 
purpose  of  comparing  price  indications  on  various  markets.  This  data  was  deemed 
representative  because  it  covered  82%  of  imports  to  the  Community  market.  The 
Community  sales  prices  included  on  the  sampling  returns  were  cross-checked  with 
statistical  information  (Taric  data)  available  to  the  Commission.  However,  the 
statistical  information  could  not  be  used  for  price  comparisons  as  it  did  not  cover 
Vietnamese domestic sales and exports to third countries.  

(156)  Although Comext based data was another reliable source it did not provide, as already 
explained in recital (67), the possibility of comparing prices on different markets. 

(157)  Prices on the Community market were obtained from Community producers' sampling 
data. The investigation established that these average prices were of comparable types 
to the imported footwear because: 

– 

– 

– 

– 

they concerned like products; 

they were at the same level of trade ; 

they were at comparable incoterms; 

they involved comparable quantities. 

4.2.  Relationship between prices in the Community and Vietnam 

(158)  Sampling  returns  indicated  that  the  Vietnamese  domestic  prices  established  on  the 
basis  of  exporters'  own  data  were  lower  than  prices  on  the  Community  market.  It 
should, however, be noted that the data of all non-sampled companies (including data 
relating to any domestic sales) could not be verified. A detailed analysis of domestic 
prices  in  Vietnam  could  therefore  not  be  performed.  Moreover,  as  in  the  case  of  the 

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PRC,  it  was  not  deemed  necessary,  given  the  overall  finding  of  continuation  of 
dumping. 

4.3.  Relationship  between  export  prices  to  third  countries  and  the  price  level  in  the 
Community 

(159)  According  to  data  from  the  Vietnam  General  Statistics  Office  and  the  Vietnam 
General  Department  of  Customs  (2008  calendar  year)  around  50%  of  Vietnamese 
footwear  exports  are  dispatched  to  the  Community  market.  Further,  the  sampling 
information  received  shows  that  during  the  RIP  the  co-operating  exporters  also  sold 
very large volumes on third country markets. 

(160)  Sampling returns indicated that the prices achieved by the Vietnamese co-operators on 
major  third  country  markets  were  lower  than  prices  prevailing  on  the  Community 
market. This indicated that Vietnamese producers could export larger quantities to the 
Community. 

4.4.  Relationship between export prices to third countries and prices in Vietnam 

(161)  Bearing  in  mind  the  low  volume  of  sales  made  by  the  exporting  producers  on  the 
Vietnamese  domestic  market  no  meaningful  conclusion  could  be  made  in  respect  of 
this comparison.  

4.5.  Unused capacities and stocks 

(162)  All  Vietnamese  companies  in  the  sample  operated  a  production  to  order  system  and 
therefore their only stocks were of finished goods awaiting despatch. The production 
to order system is employed because the footwear sector has to adapt to new fashions 
each season based on orders from customers and cannot utilise sales from stocks. It is 
therefore considered that stocks are in this case not a very strong indicator. 

(163)  The investigation established that unused capacities of all 51 co-operating Vietnamese 
companies account for about 17% of their total production capacity for footwear. This 
quantity  would  correspond  to  34  million  pairs  for  the  51  co-operators  or  around  42 
million  pairs  for  all  exporting  producers.  The  latter  figure  is  around  6%  of  total 
Community consumption (as given in table 3). 

(164)  The  likely  use  of  this  spare  capacity  was  analysed.  Given  the  aforementioned 
differences between the price levels in the Community and on third country markets, 
Vietnamese companies are likely to have an incentive to use their spare capacity for 
exports  to  the  Community.  This  conclusion  is  supported  by  the  attractiveness  of  the 
Community market in terms of its size. 

(165)  Furthermore, it should be pointed out that the existing assembly lines can be used to 
produce other kinds of footwear such as STAF and shoes with textile uppers as well as 
the product concerned. The companies sampled and the other co-operators in Vietnam 
produced  large  quantities  of  footwear  which  was  not  the  product  concerned.  The 
current split between production of the product concerned and other footwear depends 
on  the  requirements  of  consumers  and  the  ordering  and  sourcing  policies  of  the 
Community  importers.  However  should  the  measures  be  repealed  the  Community 
importers would reassess their sourcing policies and may order a greater proportion of 

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the product concerned from Vietnamese producers. This could result in an increase of 
the quantities of the product concerned exported to the Community. 

4.6.  Conclusion 

(166)  In addition to the continuation of dumping at high levels the investigation has shown 
that  should  measures  be  repealed  there  would  be  a  likelihood  of  continuation  of 
dumping. This conclusion is based on the attractiveness of the Community market in 
terms of its size and price levels. 

(167)  Furthermore, a number of factors including the relative levels of prices, the availability 
of spare capacities, and the ability to switch from the production of other footwear to 
the  product  concerned  provide  evidence  for  an  increase  in  imported  quantities  if 
measures  are  repealed.  On  the  other  hand,  other  factors  such  as  the  world  economic 
crisis  and  a  tendency  to  switch  production  to  other  countries  will  inevitably  reduce 
imported  quantities  to  some  extent.  These  factors  are  further  analysed  in  section  5 
(Developments following the RIP) below.  

(168)  It  is  concluded  that  imports  from  Vietnam  will  continue  to  enter  the  Community 
market in large volumes and that such volumes will be sold at low, dumped prices so 
that there is likelihood of continuation of dumping should the measures be allowed to 
lapse. 

5. 

Developments following the RIP 

(169)  The  impact  of  post-RIP  developments  as  regards  both  PRC  and  Vietnam  were  also 
analysed because they were considered significant enough to affect the volumes of the 
product  concerned  produced  in  the  countries  concerned  and  exported  to  the 
Community market, and its prices.  

5.1. 

The worldwide economic crisis 

(170)  The crisis began in the second half of 2008 (i.e. after the end of the RIP). Some parties 
argued that it would have an impact on the production and exports (including exports 
to  the  Community)  of  the  product  concerned  originating  in  the  countries  concerned 
because of the shrinking consumption on the world and Community footwear markets.  

5.2.  Developments in import volumes and prices following the RIP 

(171)  It  should  be  stated  at  the  outset  that  the  allegations  made  by  parties  concerning  the 
likely  impact  of  post-RIP  developments  on  export  volumes  from  the  countries 
concerned  and  the  consumption  in  the  Community  were  contradictory.  Some 
interested parties estimated that exports from the countries concerned could fall by as 
much as 25-30% in 2009 as compared to RIP figures. Other interested parties expected 
such  imports  to  remain  stable.  The  Eurostat  statistics  available  for  the  first  half  of 
2009 indeed show a fall of 25% of import volumes from China and a fall of 28% of 
import volumes from Vietnam. In terms of prices, Eurostat statistics show an increase 
of 34% for imports of the product concerned from China and an increase of 26% for 
imports  of  the  product  concerned  from  Vietnam.  However,  taking  into  account  the 
reasons  expressed  in  recital  (67)  above  these  trends  can  not  be  considered  as 
representative.  

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5.3.  A Switch in the sourcing of Community imports from the  PRC and Vietnam  to  other

countries 

(172)  Some parties argued that exports of the product concerned originating in the countries 
concerned would fall because of a switch in sourcing away from the PRC and Vietnam 
to  other  countries  such  as  Indonesia,  Cambodia  and  India.  It  was  argued  that  the 
process  began  after  the  imposition  of  measures  in  April  2006  and  would  continue  if 
measures  were  re-imposed  following  the  current  review.  Other  reasons  for  such  a 
switch  were  also  mentioned,  most  notably  rising  production  costs.  For  China  they 
were  alleged  to  be  due  to  rising  labour,  energy  and  local  materials  costs,  as  well  as 
environmental  and  labour  legislation.  An  increase  in  the  value  of  RMB  was  also 
brought  up  as  a  possible  cause  of  the  switch  to  other  countries.  For  Vietnam  it  was 
alleged  that  there  was  a  switch  of  sourcing  to  other  countries  because  of  increasing 
labour costs together with the loss of the 3.5% GSP duty benefit on imports to the EU. 
Furthermore, it was argued that the switch of sourcing away from China and Vietnam 
was made attractive due to footwear production competitiveness improvements in the 
countries that are the new source. It was also argued that the switch was made easier 
by the fact that many producers in the countries concerned were owned or controlled 
by  companies  in  other  parts  of  South  East  Asia,  such  as  Taiwan  or  Hong  Kong  and 
because  sourcing  of  footwear  for  the  Community  market  is  controlled  by  large 
Community  importers,  who  have  the  means  to  easily  change  their  sources  of  supply 
whenever necessary.  

(173)  For the PRC, although it was apparent that some exporters have relocated and might 
further relocate to reduce their costs, the relocation was sometimes to other parts of the 
PRC  (away  from  the  coastal  provinces  which  formed  the  traditional  footwear 
production base). Such a move would not, in itself, lead to a reduction in production 
and exports from the PRC. 

(174)  As  regards  Vietnam,  it  is  not  considered  likely  that  the  3.5%  duty  increase  resulting 
from  GSP  graduation  is  of  a  magnitude  such  as  to  prompt  significant  relocation  of 
production. Whilst it cannot be excluded that this graduation may have some impact 
on  export  volumes  from  Vietnam,  it  is  unlikely  to  considerably  affect  the  sourcing 
decisions  of  large  Community  importers.  It  is  recalled  that  despite  the  imposition  of 
anti-dumping duties much higher than 3.5%, both Vietnam and China maintained high 
levels of import volumes into the Community. 

(175)  It  is  therefore  considered  that  any  relocation  of  production  would  not  be  of  such  a 

magnitude as to radically change importers' sourcing decisions.  

(176)  As regards imports from other countries into the Community, it was found that, after 
the  anti-dumping  measures  were  imposed,  they  did  increase  from  certain  Asian 
countries. This, however, does not alter the fact that the product concerned continued 
to be imported from the two countries under investigation into the Community in very 
significant volumes and at dumped prices. 

5.4.  Development of Chinese Domestic Consumption 

(177)  Some parties argued that exports from the PRC would fall because of an increase in 
the  Chinese  domestic  consumption,  encouraged  by  the  policies  of  the  Chinese 
authorities.  However,  none  of  the  parties  submitted  evidence  which  would  allow  an 

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evaluation  of the expected  consumption growth – this evaluation is made even more 
difficult due to the economic crisis.  

(178)  Whilst  it  is  not  unreasonable  to  assume  that  China's  recent  economic  growth  will 
result,  at  least  in  the  medium  term,  in  some  increase  in  domestic  consumption  of 
footwear, no evidence has been submitted to demonstrate that this growth would lead 
to a (further) reduction in exports to the Community.  

5.5.  Conclusion 

(179)  The economic crisis is having a downward influence on imports into the Community 
from  the  countries  concerned.  It  is  however  not  unreasonable  to  assume  that  a 
recovery  will  follow  at  some  stage,  which  would  then  result  in  increased  sales 
volumes. Even if the highest forecast of a 25 – 30% fall materialized over 2009 as a 
whole,  volumes  from  the  PRC  would  still  reach  over  80  million  pairs  and  achieve  a 
Community market share of above 10% and volumes from Vietnam would still reach 
around 48 million pairs and achieve a Community market share of around 7%. 

(180)  As  regards  a  switch  of  sourcing  of  Community  imports,  it  was  found  that  the 
relocation  observed  to  date  has  not  had  a  determinative  effect,  and  there  is  no 
indication  that  there  would  be  in  the  near  future  any  major  change  in  the  trends 
observed so far. 

(181)  Exports from the countries concerned to the Community have continued to be made at 
dumped  prices  during  the  RIP.  In  view  of  the  economic  crisis  and  the  (expected) 
contraction in demand, and in the absence of any information on import prices during 
the  post-RIP  pointing  to  the  contrary,  it  does  not  seem  unreasonable  to  predict  that 
exports will continue to be made at dumped prices.  

(182)  In light of the above findings concerning both the RIP and post RIP developments it is 

concluded that there is a likelihood of continuation of dumping.  

D. COMMENTS FROM INTERESTED PARTIES FOLLOWING DISCLOSURE 

(183)  A number of comments were received following disclosure of the findings. However, 
none of these were such to alter the conclusions. The main arguments raised were as 
follows. 

1. 

Choice of analogue country 

(184)  Several parties reiterated comments they had made in the course of the investigation 
regarding  the  choice  of  analogue  country.  They  restated,  inter  alia,  the  view  that 
Brazil  was  not  an  appropriate  choice  because  of  high  protection  through  tariffs  and 
non-automatic licenses, higher socio-economic development than China and Vietnam, 
assumed  specialisation  in  women's  footwear,  and  alleged  dumping  practices.  The 
Commission  had  already  taken  note  of  these  arguments,  and  addressed  them 
thoroughly in the disclosure and in recitals (68)-(108) of the present Regulation. The 
analysis  clearly  showed  that  Brazil  was  the  most  appropriate  choice  as  analogue 
country in this case.  

2. 

Representativeness of the sample 

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(185)  Some  interested  parties  claimed  that  the  sample  of  exporters  was  less  representative 
than reported in recital (15) and (18), because the dumping margin was calculated on 
the basis of 4 of the 12 months of the RIP. It is recalled, that this is the methodology of 
calculation  normally  used  by  the  Commission  in  expiry  reviews,  where  it  should  be 
determined whether there is continuation of dumping or a likelihood that dumping will 
recur. The investigation on spot ensured that the 4 months were representative of the 
full  12  month  period.  This  was  achieved  by  comparing  costs  and  prices  of  the  4 
months data supplied with the remaining 8 months. In addition the 4 months selected 
were  the  last  month  of  each  quarter  and  therefore  evenly  spread  over  the  12  month 
period. The Commission does not therefore agree that the method applied reduced the 
representativeness of the sample.  

3. 

Product classification and comparability 

(186)  It was claimed by certain interested parties that by correcting mistakes on PCNs made 
by  the  cooperating  exporters,  as  mentioned  in  recital  (59),  the  Commission  has 
changed  the  methodology  used  in  the  original  case.  This  allegation  is  unfounded.  It 
was  precisely  in  order  to  use  the  PCN  system  adopted  in  the  previous  case  that  the 
Commission corrected wrong PCN classification errors made by some exporters.  

(187)  It was alleged by certain interested parties that there was an insufficient level of direct 
matching  of  PCN's  and  that  the  method  resorting  to  closely  resembling  PCNs  is 
flawed. This claim cannot be accepted. This system was applied already in the original 
investigation. In the specific disclosures sent to parties in the present investigation, the 
Commission  attached  the  correlation  tables  where  the  use  of  each  resembling  PCN 
was  explained.  The  use  of  closely  resembling  PCNs  ensures  a  fair  comparison 
between Brazilian models and models sold by the export countries. Moreover, where 
necessary, the normal values stemming from resembling PCNs were properly adjusted. 
Furthermore,  no  party  made  any  comment  on  a  possible  inaccuracy  of  a  most 
resembling PCN used.  

4. 

Calculation of dumping 

(188)  Some  parties  stated  that  the  calculation  of  dumping  using  Indonesia  as  analogue 
country was flawed, because the data used were neither verified nor properly adjusted. 
The Commission has examined the data presented by Indonesian companies, the use 
of  which  was  suggested  by  several  parties.  As  no  adjustments  were  claimed,  the 
Commission did not deem necessary to apply any. In any event, it is recalled that in 
this  particular  case  Indonesia  was  used  only  to  cross-check  the  finding  based  on 
Brazil. 

5. 

Likelihood of continuation of dumping 

(189)  Several  parties  argued  that  the  decrease  in  import  volumes  from  China  and  Vietnam 
between  2005  and  2008  (which  continued  after  the  IP)  and  the  increase  of  import 
prices  in  the  same  period  suggest  that  there  is  no  likelihood  of  continuation  of 
injurious dumping. It is recalled that imports from China and Vietnam have more than 
28% market share in the EU in the RIP, which is very substantial. It is noted that in 
absolute figures import volumes from China and Vietnam were in the RIP larger than 
in  the  OIP,  for  which  already  injurious  dumping  had  been  established.  Furthermore, 

EN 

37 

   EN 

 
the analysis of the sampled exporters' verified data showed that since 2006 prices have 
decreased. 

(190)  It was claimed by certain interested parties that production costs in China and Vietnam 
have increased reducing the competitive threat of the companies. The Commission is 
of  the  view  that,  since  China  and  Vietnam  are  not  market  economies,  an  increase  in 
cost  does  not  necessarily  entail  a  loss  of  competitiveness  on  the  world  market.  The 
investigation showed that both countries continued to keep high market shares in the 
EU market and hence to be a threat. 

(191)  Some parties raised that, while the EU accepted that imports fell after the RIP because 
of  the  economic  crisis,  it  was  not  accepted  as  a  decisive  point  in  the  likelihood  of 
recurrence  of  dumping.  As  was  explained  in  recitals  (179)  to  (180)  this  was  not 
accepted as a decisive point because the post RIP volumes are still very high and have 
a large EU market share at dumped prices. Clearly, these are indicators that they are 
very likely to continue in the future in significant volumes. 

(192)  Some parties contested the attractiveness of the Community market and claimed that 
other destinations, in particular the US and, partly, Russia, are at least of equal interest 
to  Chinese  and  Vietnamese  exporters.  It  was  also  mentioned  that  submissions  of  a 
party regarding expected substantial growth of the Chinese market itself was not duly 
considered.  The  Commission  examined  this  matter  and  found  that  the  Community 
market remains one of the most attractive markets for the Chinese exporters. Should 
the anti-dumping duties be repealed, the Community market would become even more 
attractive  and  volumes  would  therefore  likely  increase.  As  regards  the  expected 
growth of consumption in China, the Commission looked into the elements provided 
by  this  party,  but  considered  these  insufficient  to  alter  the  conclusions.  Even  if  this 
growth can be anticipated, there is no substantiated evidence that the growth would be 
of such magnitude to lead to a significant reduction of exports. On these grounds this 
argument had to be rejected. 

E. DEFINITION OF THE COMMUNITY INDUSTRY 

1. 

Community production and standing 

(193)  The  review  request  was  lodged  by  the  CEC  on  behalf  of  Community  producers 
representing  more  than  25%  of  the  Community  production  of  the  product  concerned 
during the RIP.  

(194)  One  interested  party  claimed  that  a  number  of  the  members  of  the  CEC  presumably 
supporting  the  complaint  have  themselves  started  to  import  large  volumes  from  the 
countries concerned. It was also claimed that a significant 'real' production no longer 
took place in the Community. No evidence was provided in this regard to substantiate 
this allegation.  

(195)  In  this  context,  all  available  information,  including  information  provided  in  the 
complaint, data collected from Community producers and national associations before 
and after the initiation of the investigation, as well as general production statistics was 
used  in  order  to  establish  total  Community  production  and  the  support  for  the 
investigation.  The  investigation  revealed  that  none  of  the  complaining  Community 
producers should be excluded from the definition of Community production because, 

EN 

38 

   EN 

 
based on information obtained through the complainant, none of them were found to 
be  related  to  exporting  producers  in  the  countries  concerned  and  imports  from  the 
countries concerned, if any, were minimal. For each company concerned those imports 
constituted at the most 25%of its production in the Community. 

(196)  As  detailed  under  recital  (23)  and  onwards,  one  of  the  companies  included  in  the 
Community  industry  sample  was  found  to  have  discontinued  production  in  the 
Community in the period considered. It was considered whether this company should 
be excluded from the definition of Community industry. However, the weight of this 
company was minimal in terms of overall production as well as in relation to the rest 
of  the  sample.9  Therefore,  even  if  this  company  was  excluded,  there  would  be  no 
change in the overall picture in terms of standing. 

(197)  Overall,  the  investigation  has  shown  that  there  continues  to  be  a  significant  leather 
footwear  production  in  the  Community,  established  in  several  Member  states 
employing  around  262,000  people.  The  footwear  production  sector  is  constituted  of 
around 18,000 SME mainly situated in seven European countries with a concentration 
in three major producing countries. 

(198)  The investigation did however reveal that two companies belonging to the same group 
were  found  to  be  related  to  exporting  producers  in  the  PRC  and  the  group  was  also 
itself  importing  significant  quantities  of  the  product  concerned,  including  from  its 
related  exporters  in  the  PRC.  Therefore,  these  companies  were  excluded  from  the 
notion of Community production in the meaning of Article 4(1) and 5(4) of the basic 
Regulation.  

(199)  Based on the above it was found that overall production of the Community Industry in 
the  meaning  of  Article  4(1)  and  5(4)  of  the  basic  Regulation  was  366  million  pairs 
during the RIP.  

(200)  Considering that the Community producers supporting the request accounted for more 
than  25%  of  the  total  production  and  in  the  absence  of  opposition  equal  to  or  larger 
than that magnitude, it is therefore concluded that the request is supported by a major 
proportion of the Community industry within the meaning of Article 4(1) and Article 
5(4) of the basic Regulation. 

2. 

Development of Community production structures  

(201)  The  data  of  the  present  case  refers  to  an  enlarged  Community  of  27  Member  States 
rather than the 25 countries examined in the original case. Romania, which joined EU 
in  2007,  is  a  significant  producer.  However,  an  important  part  of  its  output  is  rather 
transformation  of  raw  material  against  a  service  fee  ("toll  manufacturing")  for  other 
companies in the Community. The impact of the genuine Romanian production on the 
overall picture of Community production and other indicators is therefore limited. The 
same  limited  impact  can  be  attributed  to  Bulgaria.  Enlargement  has  thus  not  had  a 
significant effect in this regard. 

9 

In view of the need to protect the identity of the complainants as indicated in recital (40) and onwards, 
an exact figure of the relative weight of this company in relation to the rest of the sample could not be 
given as this could give indications as to the identity of the company. 

EN 

39 

   EN 

 
                                                 
(202)  The  footwear  sector  in  the  Community  is  characterised  by  networks  of  micro 
(employing less than 10 persons) and small enterprises. Companies of more than 500 
employees are exceptions and employ only a limited portion of the overall workforce 
in the sector. Micro and small enterprises have the advantage to be more flexible and 
adaptable  to  changes  of  market  demand,  but  on  the  other  hand,  they  are  financially 
more vulnerable to the international competition and to the economic downturn. 

(203)  Compared to the situation found in the original investigation, the production structures 
have  changed  in  many  ways.  Under  the  pressure  of  international  competition,  many 
producers  have  disappeared,  some  altogether  and  others  becoming  distributors  of 
production in Asian countries and closer to home (Bosnia, Croatia, Morocco, Tunisia, 
Serbia).  Others  have  decided  to  move  parts  of  the  manufacturing  process  within  the 
EU (Romania, Hungary, Poland).  

(204)  As  part  of  a  process  to  change  business  model,  many  operators  have  also  pooled 
production  facilities  through  the  integration  in  clusters  set  up  through  flexible  sub-
contracts  with  other  producers.  With  this  system  a  leader  company  provides  design, 
raw  material  (which  remains  property  of  the  leader  company)  and  outsources  in  its 
geographical vicinity the manufacturing (or one or more phases of the manufacturing 
such  as  stitching)  to  various  specialized  micro  companies  granting  to  them  a  regular 
seasonal  activity  by  agreed  quantities.  At  the  end  of  the  process  the  leader  company 
pays a fee for the work performed by the sub-contractors. 

(205)  Part of the industry has also undergone a change in business model characterised by a 
move  in  production  towards  the  upmarket  segment  concentrating  in  higher  value 
products.  Some  of  the  biggest  EU  producers  could  thus  find  new  opportunities  by 
creating  their  own  brand.  Some  of  these  producers  use  monobrand  franchised  shops 
when  possible,  some  others  have  managed  to  obtain  parts  of  independent  shops 
reserved to their brand.  

(206)  Many  companies  in  this  group  have  in  addition  modified  their  distribution  policy, 
favouring sales to retailers (or even own retailing) rather than selling to wholesalers. 
Overall, these changes show a sector were different business models coexist. 

(207)  The  above  changes  towards  cluster  production,  a  higher  end  product  segment  and 
changes  in  distribution  policy  have  allowed  increased  flexibility  and  efficiency 
through  the  pooling  of  resources  to  make  use  of  economies  of  scale.  It  has  also 
increased their ability to obtain the necessary financial means from the banks system.  

(208)  These  developments  show  a  sector  where  different  business  models  coexist.  A  large 
part  of  industry  is  still  in  a  very  early  stage  of  changing  business  model  and  would 
need  more  time  to  complete  the  process.  The  second  group,  that  have  changed 
business  model,  have  increased  significantly  during  the  period  considered  but  they 
have  nevertheless  not  been  able  to  fully  benefit  from  the  reduction  in  the  number 
producers on the market, as would otherwise have been expected  

F. SITUATION OF THE COMMUNITY MARKET 

1. 

Consumption in the Community market 

Table 3 
Community market Consumption  

EN 

40 

   EN 

 
2006 

2007 

RIP 

Consumption (in 000 pairs) 

724 553  

690 285  

674 826  

Index: 2006=100 

100  

95 

93  

(209)  Apparent  consumption  decreased  by  7%  during  the  period  considered,  i.e.  from  725 

million pairs in 2006 to 675 million pairs during the RIP.  

(210)  The decrease in consumption has to be seen in conjunction with a parallel increase of 
consumption of other types of shoes outside the product scope (e.g., textile, rubber & 
plastic). By reference, textile, rubber and plastic shoes consumption increased by 23% 
in the same period. This appears to point to some substitution amongst the two product 
categories, linked also to fashion trends (penetration of mixed synthetic/leather shoes, 
or synthetic shoes which resemble leather). Considering however, that the increase in 
consumption of other footwear is far higher (23%) than the decrease in consumption 
of  leather  footwear  (7%),  it  can  however  not  be  concluded  that  textile  and  other 
materials  have  substituted  leather  footwear  to  more  than  a  limited  degree. 
Furthermore, average import prices of other footwear is half of that of leather footwear 
and  this  price  difference  makes  it  clear  had  there  been  large  interchangeability 
between the two types, the far more expensive leather footwear segment would have 
been obliterated. On the contrary, a publicly available market study10 underlines that 
leather  shoes  will  have  a  continued  strong  position  in  the  market.  In  fact,  it  appears 
that  the  consumers  are  now  buying  almost  as  many  leather  shoes  as  before,  but  in 
addition they are purchasing significantly more textile and synthetic shoes. 

2. 

Current Imports from the countries concerned 

2.1. 

Import volume and market share of the imports concerned in the RIP  

Table 4 
Total import volumes from countries under investigation 

OIP  

2005 

2006 

2007(*) 

RIP(*) 

PRC (000 pairs) 
Index 2006 
Index: OIP=100 
market shares 
Vietnam (000pairs) 
Index 2006 
Index:OIP=100 
market shares 

63 403  

183 568  

100 
8.8% 
102 625  

292 
22.9% 
100 619  

100 
14.2% 

98 
12.6% 

157 560  
100 
251 
21.6% 
79 427  
100 
77 
11.0% 

123 016  
78 
195 
17.8% 
62 503  
79 
61 
9.1% 

125 052  
79 
198 
18.5% 
68 852  
87 
67 
10.2% 

(*)  As  from  September  2007  Macao  imports,  found  to  be  circumventing  the  anti-dumping 
measures, are included in PRC data. The import volumes correspond to 3.7 m in 2007 and 6.4 
m  in  the  RIP.  For  the  purpose  of  the  analysis  Macao's  imports  from  September  2007  were 

10 

CBI market study 'The footwear market in the EU'. April 2008. 

EN 

41 

   EN 

 
 
 
 
 
  
  
  
  
  
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
                                                 
considered as Chinese imports. Nevertheless even without such imports the assessment would 
not change, in view of the volumes and values involved. 

(211)  Total  Chinese  imports  decreased  from  157  to  125  million  pairs  during  the  period 

considered, or from 21.6% to 18.5% of the EU market. 

(212)  However  as  demonstrated  above,  when  comparing  to  the  OIP  a  strong  increase  of 
imports from China took place after the end of the quota system (1 January 2005), on 
the  basis  of  low  import  prices.  Import  levels  decreased  after  the  imposition  of 
measures, stabilising in 2007 and the RIP at over 120 million pairs—almost twice the 
amount of the OIP import volumes.  

(213)  In addition, it should be underlined that an anti-circumvention investigation found that 
dumped  Chinese  products  were  avoiding  the  duties  and  undermining  the  remedial 
effect of the measures by circumvention the aforesaid measures via Macao within the 
meaning of Article 13 of the Basic Regulation. This shows that the Community market 
has continued to be very important to Chinese exporting producers.  

(214)  Vietnamese  imports  decreased  in  the  period  considered  from  79  to  69  million  pairs. 
Notwithstanding this drop of over 13% as compared to the OIP, import levels remain 
significant and market shares are roughly stable around the 10% mark during the RIP. 

(215)  Together,  imports  from  China  and  Vietnam  amounted  to  237  million  pairs  in  2006, 
185 in 2007 and 194 in the RIP. While there was a decrease in volumes in the period 
concerned,  the  import  levels  are  still  higher  than  those  that  led  to  the  imposition  of 
measures  (166  million).  The  joint  market share  of  China  and  Vietnam  dropped  from 
32.7%  to  28.7%  over  the  period  but  also  in  this  case,  the  RIP  market  share  is 
considerably higher than that of the OIP of 23%. 

2.2.  Cumulative assessment of the effects of the dumped imports concerned 

(216)  The Commission considered whether the effects of dumped imports from the countries 
concerned  should  be  assessed  cumulatively,  on  the  basis  of  the  criteria  set  out  in 
Article 3(4) of the basic Regulation. This Article provides that the effects of imports 
from  two  or  more  countries  simultaneously  subject  to  anti-dumping  investigations 
shall be assessed cumulatively only if it is determined that (a) the margin of dumping 
established  in  relation  to  the  imports  from  each  country  is  more  than  de  minimis  as 
defined in Article 9(3) of the basic Regulation and that the volume of imports of each 
country is not negligible and (b) a cumulative assessment of the effects of the imports 
is appropriate in the light of the conditions of competition between imported products 
and  the  conditions  of  competition  between  the  imported  products  and  the  like 
Community product 

(217)  In this  respect,  it  was firstly  found  that the dumping margins established for each of 
the  countries  concerned  were  more  than  de  minimis.  In  addition,  the  volume  of  the 
dumped imports from each of those countries was not negligible in the sense of Article 
5(7)  of  the  basic  Regulation.  Indeed,  the  import  volume  represented  for  PRC  and 
Vietnam respectively around 18 and 10 % of the Community consumption during the 
RIP. 

EN 

42 

   EN 

 
(218)  The investigation further showed that the conditions of competition both between the 
dumped  imports  and  between  the  dumped  imports  and  the  like  Community  product 
were  similar.  It  was  found  that,  irrespective  of  their  origin,  footwear  with  uppers  of 
leather  produced/sold  by  the  countries  concerned  and  those  produced/sold  by  the 
Community industry compete against each other since they are alike in terms of their 
basic  characteristics,  interchangeable  from  the  consumer's  point  of  view  and 
distributed  via  the  same  distribution  channels.  In  addition,  the  investigation  revealed 
that  for  both  countries,  the  volume  of  imports  developed  in  parallel:  both  countries 
decreased  their  imports  by  around  10-25%  between  2006  and  the  RIP.  The  import 
prices of those two countries are also in the same order of magnitude. In addition those 
prices were found to undercut the Community industry's prices at a comparable level 
of trade. 

(219)  On  this  basis,  it  is  concluded  that  all  conditions  of  cumulation  are  met  and  that 
accordingly  the  effect  of  the  dumped  imports  originating  in  the  countries  concerned 
should be assessed jointly for the purpose of the injury analysis. 

2.3.  Price evolution and price behaviour of the imports of the product concerned 

Table 5 
Price evolution from countries under investigation 

PRC €/pair 
Index: 2006=100 
Vietnam €/pair 
Index: 2006=100 

Source: Eurostat 

2006 

2007 

RIP 

8.4 
100  

10.2 
100 

8.4 

99  

9.7 
96 

8.5 
103  
9.5 
94 

(220)  Average  prices  of  Chinese  imports  in  the  period  under  consideration  have  remained 
fairly stable, at around €8.4 per pair. This is  approximately 20% higher than the price 
level of the OIP (€7.2) Average prices of  Vietnamese imports have decreased during 
the period considered, and are in the RIP close to the €9.2 level which was at hand in 
the  OIP.  The  assessment  of  the  trends  of  average  prices  does  however  not  take  into 
account changes in product mix that might have occurred in the period considered. 

2.4.  Undercutting 

(221)  The  approach  to  calculate  the  price  undercutting  follows  that  of  the  original 
investigation.  The  import  prices,  including  the  anti-dumping  duties,  of  the  sampled 
exporting producers were compared to the Community industry prices, on the basis of 
weighted  averages  for  comparable  product  types  during  the  RIP.  The  Community 
industry prices were adjusted to an ex-works level and compared to CIF Community 
frontier  import  prices,  plus  anti-dumping  and  customs  duties.  This  price  comparison 
was made for transactions at the same level of trade, duly adjusted where necessary, 
and after deduction of rebates and discounts. For a fair comparison, adjustments were 
made  to  reflect  costs  incurred  in  the  Community  by  the  importers,  such  as  design, 
selection  of  raw  material,  etc,  which  otherwise  would  not  be  reflected  in  the  import 

EN 

43 

   EN 

 
 
 
 
 
  
  
  
  
  
price. This was justified since footwear imported is produced on order on the basis of 
the specifications (raw material, design) given by the importers themselves.  

(222)  On the basis of the cooperating exporting producers' prices, the undercutting margins 
found, by country, expressed as a percentage of the Community industry's prices, are 
as follows: 

Table 6 
Undercutting margins 

Country 

Price undercutting 

PRC 
Golden Step (PRC) 
Vietnam  

31.9% 
37.1% 
38.9% 

3. 

Imports from other third countries 

3.1. 

Import volume market share and prices in the RIP 

Table 7 
Import volume from other third countries 

Volume 

2006 

2007 

RIP 

India (million pairs) 
index: 2006 = 100 
Market share 
Indonesia (million pairs) 
index: 2006 = 100 
Market share 
Brazil (million pairs) 
index: 2006 = 100 
Market share 
Thailand (million pairs) 
index: 2006 = 100 
Market share 
Tunisia (million pairs) 
index: 2006 = 100 
Market share 
Morocco (million pairs) 
index: 2006 = 100 
Market share 
Others - (million pairs) 
index: 2006 = 100 
Market share 

50 
100  
7% 
20 
100 
3% 
21 
100 
3% 
11 
100  
2% 
10 
100 
1% 
10 
100 
1% 
63 
100  
9% 

EN 

56 
112  
8% 
31 
158 
5% 
21 
98 
3% 
12 
107  
2% 
12 
130 
2% 
10 
98 
1% 
59 
93  
9% 

55 
111  
8% 
29 
144 
4% 
22 
102 
3% 
12 
108  
2% 
12 
124 
2% 
10 
99 
1% 
67 
107  
10% 

44 

   EN 

 
 
 
  
  
 
 
 
 
 
  
  
  
  
Total (million pairs) 
index: 2006 = 100 
Market share 

185 
100 
26% 

207 
112 
30% 

201 
109 
30% 

Table 8 
Import values from other third countries 

Values 

2006 

2007 

RIP 

India €/pair 
index: 2006 = 100 
Indonesia €/pair 
index: 2006 = 100 
Brazil €/pair 
index: 2006 = 100 
Thailand €/pair 
index: 2006 = 100 
Tunisia €/pair 
index: 2006 = 100 
Morocco €/pair 
index: 2006 = 100 
Others €/pair 
index: 2006 = 100 
Total €/pair 
index: 2006 = 100 

11.34 
100 
9.98 

100  

15.8 
100 
12.56 
100 
12.76 
100 
14.6 
100 
14.64 
100 
13.16 
100 

11.67 
103 
10.06 
101  
15.78 
100 
13.54 
108 
13.2 
103 
15.05 
103 
14.25 
97 
13.07 
99 

11.98 
106 
9.67 
97  
16.83 
107 
13.55 
108 
13.39 
105 
14.98 
103 
15.26 
104 
13.40 
102 

(223)  As  seen  in  the  above,  total  imports  of  other  third  country  imports  have  increased  in 
absolute terms in the period under consideration. Overall imports have gone from 185 
million in 2006 to 201 million in the RIP and in market share they have increased from 
26% to 30% in the RIP.  

(224)  Prices from third countries are however on average 34% higher than Chinese prices, 

and 28% higher than Vietnamese prices.  

G. ECONOMIC SITUATION OF THE COMMUNITY INDUSTRY 

1. 

Preliminary remarks 

(225)  Pursuant  to  Article  3(5)  of  the  basic  Regulation,  the  Commission  analysed  all 
economic factors and indices having a bearing on the state of the Community industry.  

(226)  As explained above, considering the peculiarity of the sector and the large number of 
complainant Community producers, the provisions on sampling had to be used. For the 
purpose  of  the  injury  analysis,  the  injury  indicators  have  been  established  at  the 
following two levels: 

– 

The  macroeconomic  elements  (production,  sales  volume,  market  share, 
employment,  productivity,  growth,  magnitude  of  dumping  margins  and 
recovery  from  the  effects  of  past  dumping)  were  assessed  at  the  level  of  the 
whole  Community  production,  on  the  basis  of  the  information  collected  from 

EN 

45 

   EN 

 
 
 
 
 
  
  
  
  
the  national  Community  producers  associations  and  individual  companies. 
These factors were cross-checked, where possible, with the overall information 
provided by the relevant official statistics. 

– 

The  analysis  of  microeconomic  elements  (stocks,  sales  prices,  cash  flow, 
profitability,  return  on  investments,  ability  to  raise  capital,  investments, 
employment  and  wages)  was  carried  out  for  the  individual  companies,  i.e.  at 
the level of those Community producers that were included in the sample. 

2. 

Macro-economic indicators 

2.1.  Output, production capacity and capacity utilisation 

Table 9 
Production capacity and utilisation 

Production (000 pairs) 
Index: 2006=100 
Capacity (000 pairs) 
Index: 2006=100 
Capacity utilisation 
Index: 2006=100 

2006 

2007 

RIP 

390 314  
100 
551 844  
100 
71% 
100 

383 692  
98 
571 663  
104 
68% 
95 

365 638  
94 
564 091  
102 
66% 
92 

Source:  data  related  to  EU27:  Prodcom  as  confirmed  by  data  obtained  by  individual  producers  as  well  as 
producer associations Note: As explained above in recital(23), the investigation revealed that the output of the 
sampled  Community  producers  was  between  18-21%  lower  in  the  period  considered  than  originally  indicated 
due to the situation of one producer in particular. Based on the information on file, there was no indication that 
the  finding  for  this  producer  would  be  applicable  to  the  entire  sector.  However,  the  possibility  that  the  lower 
production finding was valid for the full Community production was examined. In order to verify the impact of 
this variation if applied to all Community production, a cross-check was made based on an assumption of a 20% 
decrease  of  the  total  Community  production  throughout  the  period  considered  It  is  noted  that  the  difference 
between  the  production  volume  of  the  sample  determined  in  the  investigation  and  that  originally  indicated 
remained  stable  throughout  the  period  considered  with  only  minor  variations.  It  was  therefore  found  that  the 
overall  trends  in  the  injury  factors  relevant  to  this  exercise  (market  share,  productivity  etc.)  would  not  be 
affected.  

(227)  Production decreased by 6% in the period considered, largely mirroring the decrease in 

consumption of leather shoes noted for the same period. 

(228)  Some  interested  parties  representing  importers  and  retailers  claimed,  but  without 
providing any evidence; that the decrease in production in the Community would have 
to  be  seen  as  a  positive  indication  rather  than  a  sign  that  the  Community  industry 
continued  to  suffer  injury  in  the  period  concerned.  According  to  these  parties,  the 
decrease in production has been the consequence of a conscious streamlining process 
in  the  Community  industry  whereby  the  lower  end  segment  has  been  abandoned  in 
favour of the medium high end segment in which the Community industry has always 
been competitive 

(229)  In  this  respect  it  should  however  be  underlined  and  as  determined  already  in  the 
original investigation that, many Community producers have disappeared because they 
were not able to compete against dumped imports—not necessarily due to inherent or 

EN 

46 

   EN 

 
 
 
 
 
  
  
  
  
  
structural  lack  of  competitiveness.  Therefore  the  allegation  that  the  decrease  of  the 
Community production has to be considered as a positive indication is rejected  

(230)  One  interested  party  claimed  that  the  fact  that  the  Community  industry  capacity 

utilisation had remained stable showed that no injury was taking place.  

(231)  As was already concluded in the original investigation the actual capacity in this sector 
is  strongly  dependent  on  the  number  of  workers  available  rather  than  the  technical 
capacity  of  the  machines  in  the  production  line.  For  this  reason,  capacity  is  best 
measured by assessing the employment level as detailed below in section 2.3. In any 
event  contrary  to  the  claim  made  by  the  parties  the  investigation  demonstrated  that 
capacity  utilisation  when  assessed  from  the  point  of  view  of  technical  capacity, 
decreased from 71% to 66% in the period considered and the argument that the stable 
utilisation rate would be a sign of no injury, can therefore not be upheld 

2.2. 

Sales volume and market share 

Table 10 
Sales volume and market share 

2006 

2007 

RIP 

Sales (000 pairs) 
Index: 2006=100 
Market shares 
Index: 2006=100 

302 784  
100 
41.8% 
100 

298 116  

98 
43.2% 
103 

279 865  
92 
41.5% 
99 

(232)  The Community industry sales decreased in absolute terms by 8% in the period under 
consideration.  However,  in  view  of  the  fact  that  the  same  period  saw  a  decrease  in 
consumption  of  7%,  the  Community  industry  still  managed  to  maintain  its  market 
share  at  a  stable  rate.  When  comparing  to  the  situation  in  the  original  investigation 
which  saw  a  drop  in  sales  of  33%  is  also  clear  that  the  free  fall  in  sales  and  market 
shares have been halted after the imposition of the measures. 

(233)  One interested party claimed that no injury existed since the Community industry had 
increased  its  market  share  in  the  period  considered.  The  investigation  has  however 
revealed that the Community industry's  market share has  seen very small changes in 
the  period  considered.  Furthermore,  as  detailed  above  in  section  E.2  it  would  have 
been expected that the streamlining of production and change in business model would 
have allowed the companies that remain to materially increase their market presence. 
The fact that sales of the Community producers have remained flat indicates that the 
pressure caused by dumped imports continues to be a concern. 

(234)  Some  interested  parties  claimed  that  the  fact  that  the  Community  industry  had  not 
increased  its  market  share  since  the  introduction  of  duties  has  shown  that  the 
Community industry has not been able to benefit from the duties and that the imported 
products  in  any  event  are  not  substitutable  with  the  product  produced  in  the 
Community. 

(235)  Again it should be underlined that market share is only one of the indicators examined 
and that as detailed below under other factors, the investigation has shown that there is 

EN 

47 

   EN 

 
 
 
 
 
  
  
  
  
  
significant  competition  between  Community  manufactured  products  and  the  product 
imported  from  the  countries  concerned.  While  it  is  correct  that  the  Community 
producers have not been able to significantly increase their market share the massive 
drop in sales seen in the original investigation has been halted and the measures have 
allowed Community producers to stabilise sales and market share. Further increases in 
market share appear to have been halted by the price pressure generated materially by 
dumped imports as seen in recitals (261) - (262).  

(236)  Other  interested  parties  claimed  that  the  Community  industry  has  seen  a  significant 

improvement in export performance and that injury therefore no longer was at hand.  

(237)  As  seen  in  the  table  below  the  investigation  has  however  contrary  to  this  claim, 
revealed  that  the  exports  performance  of  the  Community  industry  in  the  period 
considered showed a slight decrease rather than an increase.  

(238)  In any event, it should be noted that exports counts for only 25% of the Community 
producers' sales. The performance in the Community is therefore still by far the most 
important  factor  determining  the  financial  situation  of  Community  producers.  In 
addition,  the  investigation  has  not  shown  that  an  increase  in  export  activity  would 
provoke a drop in the sales in the Community. 

(239)  Considering  the  above,  the  argument  that  the  improved  export  performance  would 

have eliminated the injury sustained by the Community industry cannot be upheld. 

Table 11 
Export by Community  

2006 

2007 

RIP 

Exports by the Community (000, pairs) 
Index: 2006=100 

91 395 
100 

89 845 
98 

89 739 
98 

Source: Comext  

2.3.  Employment 

Table 12 
Employment 

2006 

2007 

RIP 

Total employment (in 000)  
Index: 2006=100 

267 
100 

264 
99 

262 
98 

(240)  Community  producers  employed  around  260  000  persons  directly  involved  in  the 

production of the product concerned in the RIP. 

(241)  One  interested  party  claimed  that  the  fact that  employment  levels  in  the  Community 

industry had remained stable indicates that injury is no longer sustained. 

(242)  In  this  context  it  is  recalled  that  the  assessment  of  injury  has  to  be  founded  on  an 
analysis of all relevant indicators and not only on one factor in isolation. Furthermore, 

EN 

48 

   EN 

 
 
 
 
 
  
  
  
  
  
 
 
 
 
  
  
  
  
  
the  investigation  ascertained  that  employment  of  the  Community  industry  decreased 
slightly  (-2,0%).  The  fact  that  a  large  part  of  the  Community  industry  has  moved  a 
cluster system of production has likely been instrumental in allowing the employment 
levels not to decrease further and allow for the maintenance of important know how in 
the producing companies 

(243)  Another  interested  party  indicated  that  the  lack  of  available  labour  force  in  the 
Community, rather than competition from imports from the countries concerned was 
one of the main reasons of the problems facing the Community industry.  

(244)  Considering however that no evidence was provided in support of this claim and since 
the findings of the investigation did not suggest that availability of work force would 
be a significant problem to Community producers, this argument cannot be upheld.  

2.4.  Productivity  

Table 13 
Productivity 

2006 

2007 

RIP 

Productivity 
Index: 2006=100 

1 461 
100 

1 453 
99 

1 391 
95 

(245)  In this review, average productivity in the period considered has been assessed on the 
basis  of  total  employment,  including  all  work  force  of  all  production  facilities  in  a 
cluster  system.  Productivity  decreased  moderately  during  the  period.  As  mentioned 
under  section  E.2.  the  productivity  is  linked  to  the  overall  structure  and  types  of 
footwear  produced  in  the  companies  and  can  vary  greatly  from  a  country  to  another 
country and from a company to another. Therefore the drop cannot be considered as 
significant.  

2.5.  Growth  

(246)  Between 2006 and the RIP, the Community industry market share remained stable but 
considering the fact that consumption decreased Community producers still lost sales 
in absolute terms. 

2.6.  Magnitude of dumping margin 

(247)  As  concerns  the  impact  on  the  Community  industry  of  the  magnitude  of  the  actual 
margin of dumping, given the volume and the prices of the imports from the countries 
concerned, this impact cannot be considered to be negligible.  

2.7.  Recovery from the effects of past dumping or subsidisation 

(248)  Anti-dumping  measures  against  imports  of  certain  footwear  with  uppers  of  leather 
originating in PRC and Vietnam were imposed in October 2006. In this period only a 
partial  recovery  of  the  situation  of  the  Community  producers  has  been  observed  as 
detailed below. 

3. 

Micro-economic indicators  

EN 

49 

   EN 

 
 
 
 
 
  
  
  
  
  
3.1. 

Stocks  

Table 14 
Stocks 

2006 

2007 

RIP 

 (000 pairs) 
Index: 2006=100 

163 
100 

120 
73 

198 
121 

Source: verified questionnaires replies 

(249)  Stocks  remained  negligible  at  around  2%  of  the  production.  It  is  recalled  that  the 
importance of this indicator should not be overestimated as production for this product 
type  is  made  on  order  and  stock  at  a  determined  point  in  time  is  the  result  of  goods 
sold but not yet delivered. 

3.2. 

Sales prices 

Table 15 
Sales price 

2006 

2007 

RIP 

EUR/pair 
Index: 2006=100 

26.6 
100 

29.5 
111 

34.6 
130 

Source: verified questionnaires replies 

(250)  Sales  prices  increased  by  30%  during  the  period.  This  increase  is  the  result  of  two 
main  factors.  On  one  side  the  result  of  developments  in  business  model  mentioned 
above; on the other side, the cost increase mainly attributable to the raw materials. 

3.3.  Cash flow, profitability and return on investments 

Table 16 
Cash flow - profitability - R.O.I 

2006 

2007 

RIP 

Cash flow ((000€) 
Index: 2006=100 
% Profit on net turnover 
Index: 2006=100 
Return on investments 
Index: 2006=100 

7 720 
100 
1.3% 
100 
9.5% 
100 

13 101 
170 
3.4% 
261 
22.8% 
240 

13 337 
173 
3.0% 
231 
20.5% 
217 

Source: verified questionnaires replies 

(251)  The profit levels of the  Community industry improved in the period  concerned from 
1.3%  in  2006  to  3%  in  the  RIP.  The  improvement  in  the  profit  influenced  the 
evolution of the cash flow and Return of investments. This, however, has to be seen in 

EN 

50 

   EN 

 
 
 
 
 
  
  
  
  
  
 
 
 
 
  
  
  
  
  
 
 
 
 
  
  
  
  
  
the  light  of  a  significant  deterioration  and  low  levels  of  investment  in  the  original 
investigation. 

(252)  Some  interested  parties  argued  that  the  profits  of  the  Community  industry  had 
markedly  improved  and  that  this  profit  in  fact  was  substantially  higher  than  the  6% 
target profit established in the original investigation. It was thus claimed that injury no 
longer was at hand, no matter the state of the other injury indicators. 

(253)  In  this  context  it  should  be  noted  that  while  it  holds  true  that  the  profitability  levels 
have  improved,  the  investigation  has  revealed  that  the  Community  industry  has  not 
been able to reach the target profit of 6% as determined in the original investigation. A 
more  pronounced  increase  of  profit  levels  would  have  been  expected  not  the  least 
when  considering  the  effort  of  a  large  part  of  industry  in  moving  into  new  business 
models. This shows that industry is still in a fragile situation from a profitability point 
of  view.  The  argument  that  the  profit  levels  would  be  such  as  to  indicate  that  the 
Community industry no longer suffers injury must therefore be rejected.  

3.4.  Ability to raise capital 

(254)  The  investigation  has  shown  that  SMEs,  which  constitute  the  essentially  the  whole 
sector,  are  not  in  a  position,  due  to  their  still  weak  financial  situation,  to  provide 
sufficient bank guarantees and have therefore difficulties to raise new capital. 

3.5. 

Investments  

Table 17 
Investment 

2006 

2007 

RIP 

(000€) 
Index: 2006=100 

9 019 
100 

13 777 
153 

20 979 
233 

Source: verified questionnaires replies 

(255)  While  investments  did  see  an  increase  in  the  period  considered,  in  absolute  terms  it 
still  represented  only  6%  of  the  turnover  in  the  RIP.  In  addition,  this  increment  is 
influenced  by  exceptional  investments  made  in  buildings  by  one  of  the  sampled 
community producers. Otherwise, the level of investment would be stable during the 
reference  period  and  at  low  levels.  Again,  this  has  to  be  seen  in  the  light  of  a 
significant deterioration and low levels of investment in the original investigation.  

3.6.  Wages  

Table 18 
Wages 

2006 

2007 

RIP 

Salaries and wages (000€) 

Index: 2006=100 
Avg. salaries and wages per person (€) 

21 305 
100 
21 826 

23 186 
109 
21 418 

23 855 
112 
21 897 

EN 

51 

   EN 

 
 
 
 
 
  
  
  
  
  
 
 
 
 
  
  
  
  
  
Index: 2006=100 

100 

98 

100 

Source: verified questionnaires replies 

(256)  Average  wages  have  remained  flat  over  the  period  considered,  indicating  that  actual 
salaries  are  decreasing  and  not  following  the  normal  salary  development.  This  only 
further demonstrates the level of pressure exerted on Community producers  

4. 

Conclusion on injury 

(257)  As  seen  from  the  above,  not  all  factors  listed  in  the  basic  Regulation  were  found  to 
have  a  direct  bearing  on  the  state  of  the  Community  footwear  industry  for  the 
determination of injury. In particular, considering that production takes place on order, 
stocks  are  normally  either  not  held  or  only  consist  of  completed  orders  not  yet 
delivered/invoiced and were therefore found to have very little meaning in the injury 
analysis.  Similarly,  since  the  sector  continues  to  remain  labour  intensive,  the 
production  capacity  is  not  technically  limited  and  mainly  depends  on  the  number  of 
workers hired by the producers. 

(258)  The  analysis  of  the  macro  indicators  with  a  more  direct  bearing  on  the  state  of  the 
Community  industry  shows  that  Community  production  as  well  as  sales  volume  has 
decreased  at  approximately  the  same  rate  as  Community  consumption  in  the  period 
considered.  The  sales,  market  share  and  employment  of  Community  producers  have 
thus  remained  stable.  Productivity  has  seen  a  decrease  but  only  moderately.  Overall, 
while it would have been expected that the move to a new business model would have 
been able to increase sale and production of the Community producers that remain it is 
also clear that the economic free fall that industry was suffering before the imposition 
of the measure has been halted since the imposition of measures. This has also allowed 
a  large  part  of  the  Community  industry  to  change  business  model  by  way  of 
streamlining  production  processes  through  the  development  of  specialised  clusters, 
moving  up  in  the  product  segment  as  well  as  changing  focus  from  wholesale 
distribution to direct supply to retail.  

(259)  An analysis of the relevant micro indicators also supports the partial recovery of the 
Community  industry  showing  an  increase  in  sales  prices,  cash-flow  investment,  and 
profit.  The  industry  has  however  still  not  been  able  to  recover  to  normal  profit  and 
investment levels and have still problems in raising capital and in salary development 
showing that the situation is still fragile and that injury has not been totally removed. 

(260)  Overall, the investigation has revealed that the Community industry continues to suffer 

material injury.  

Impact  of  dumped  imports  from  the  countries  concerned  and  impact  of  other 

5. 
factors 

5.1. 

Impact of imports of dumped products from the countries concerned 

(261)  While  the  combined  import  volumes  from  the  countries  concerned  have  seen  a 
decrease in the period considered, the volumes in the RIP still far exceed those in the 
original investigation. In the case of China the levels are almost twice those seen in the 
OIP  and  while  import  volumes  of  Vietnam  have  decreased  in  the  same  period,  their 
presence on the market is still significant with a market share of around 10%. 

EN 

52 

   EN 

 
(262)  An  analysis  of  the  prices  of  imports  from  the  countries  concerned  in  the  period 
considered,  show  that  prices  of  Chinese  imports  have  remained  stable  while 
Vietnamese  prices  have  decreased.  When  compared  to  prices  in  the  OIP,  Chinese 
prices have increased by around 20% but prices of the Vietnamese are close to those 
found  in  the  OIP.  Notwithstanding  differences  in  product  mix  and  level  of  trade 
considerations, it is clear that average imports prices of 8.6 EUR for the PRC and 9.51 
EUR  from  Vietnam  continue  to  cause  major  concern  to  the  Community  producers 
whose average sales prices are well above 30 EUR. This becomes even more evident 
when  looking  at  the  undercutting  levels  that  have  seen  a  drastic  increase  when 
compared  to  the  OIP.  For  China  undercutting  levels  have  increased  from  13.5%  to 
31.9% in this period and for Vietnam the equivalent increase is from 15.9% to 38.9%. 

5.2.  Conclusion on the impact of imports of dumped products from the countries concerned 

(263)  On  the  basis  of  the  above  it  must  be  concluded  that  imports  from  the  countries 
concerned  both  in  terms  of  volume  and  price,  continues  to  adversely  affect  the 
performance of Community producers. 

5.3. 

Impact of other factors 

(264)  The  Commission  thoroughly  analysed  whether  any  other  known  factors  than  the 
dumped  imports  could  have  had  a  bearing  on  the  continued  injury  suffered  by  the 
Community  producers  in  order  to  ensure  that  possible  injury  caused  by  any  such 
factors was not attributed to the dumped imports. 

5.3.1.  Lack of competition between the Community-produced shoes and those imported from 
the countries concerned  

(265)  Some  interested  parties  maintained  that  there  is  no  link  between  imports  form  the 
countries concerned and the performance of the Community industry. In particular it 
was held that there was no substitution between the product concerned produced in the 
Community  and  that  imported  from  the  countries  concerned.  According  to  these 
parties there is no competition between Community produced leather shoes and those 
imported from China and Vietnam as the former tend to operate in the mid to high end 
market  segment  while  the  latter  is  mainly  destined  for  the  mid  to  low  end  segment. 
The fact that the Community industry was not able to regain market share following 
the  imposition  of  the  measures  was  held  forward  as  evidence  in  this  regard.  The 
general  improvement  as  concern  the  other  injury  indicators  would  instead  be  the 
consequence of the change in business model by the Community industry whereby a 
reduction  of  production  and  shift  towards  higher  value  added  production  which 
mitigated  the  injury  previously  suffered  for  part  of  the  Community  industry.  The 
difficulties  experienced  by  the  other  group  of  Community  producers  was  held  to  be 
caused  by  the  failure  to  adapt  rather  than  to  dumped  imports  from  the  countries 
concerned.  

(266)  The  investigation  has  shown  that  although  part  of  the  Community  industry  has  also 
been moving upmarket, it still occupies some parts of the low bracket and large parts 
of  the  medium  segment.  When  looking  at  the  dumped  imports,  these  cover  not  only 
the low segment, but also the medium segment—and in some cases, even the higher 
segment.  There  is  in  other  words  substantial  competition  between  the  leather  shoes 
produced in the Community and those imported from the countries concerned.  

EN 

53 

   EN 

 
(267)  There  had  also  been  claims  that  there  was  no  competition  between  the  Community 
producers and the exporters concerned as the Community producers are concentrated 
on  niche  products  and  do  not  supply  a  full  range  of  speciality  shoes  such  as  hiking, 
bowling, and orthopaedic shoes. In this context it should however be noted that these 
speciality shoes only form as small part of the product concerned and the impact can 
therefore not be significant. In any event, the investigation has shown that contrary to 
the  claim,  these  speciality  shoes  are  produced  in  the  Community  albeit  in  limited 
quantities  and  these  are  in  direct  competition  with  the  imported  speciality  shoes. 
Furthermore  and  as  detailed  above,  there  is  now  an  increase  in  competition  between 
many of these speciality shoes and the classical “brown shoe” traditionally produced 
by the Community industry. 

(268)  As concerns the comparison of Community production and imports from the countries 
concerned as per the age and gender, the investigation showed that there is substantial 
production in the Community of men, women and children's shoes. The focus would 
be on women's shoes making up around 55% of production while men and children's 
shoes would be 35% and 10% respectively. When looking at the breakdown in age and 
gender for shoes imported from the countries concerned the figures would be different 
with higher focus on in particular children shoes around 25%. Notwithstanding these 
variations,  it  is  clear  that  all  three  categories  are  sold  in  the  Community  market  in 
significant quantities by the Community industry as well as exporters. 

5.3.2.  Lack  of  efficiency  of  Community  producers,  structural  deficiencies  and  impact  of 
globalisation 

(269)  One  party,  representing  Consumer  interests maintained  that  the  alleged  dumping  has 
had  no  impact  on  the  situation  of  the  Community  industry  but  that  trend  of 
globalisation and the shifting of production to lower cost countries rather than unfair 
trade lays at the heart of job losses and factory closures in the Community  

(270)  Several  other  interested  parties  also  pointed  out  the  inability  of  the  Community 
industry to benefit from the measures and the effect of the change in business model 
amongst Community producers as evidence in support of the claim that there is no link 
between imports and the Community industry performance.  

(271)  According  to  these  claims,  the  Community  industry  is  structurally  incapable  to 
compete  in  the  mass  production  market  largely  due  to  lack  of  the  necessary  labour 
force  and  the  cost  thereof.  As  a  consequence,  a  significant  part  of  the  Community 
industry have moved to a new business model and have invested in product innovation 
and upgrading so as to move focus from mid- to low-end product segment to the mid- 
to high-end and luxury segment. These companies that have focused on niche products 
with  higher  added  value  are  also  showing  a  good  level  of  performance.  Conversely, 
those  companies  that  have  failed  to  respond  to  globalisation  are  continuing  to 
demonstrate  poor  results.  According  to  this  line  of  argument  the  situation  of  the 
Community  producers  should  thus  be  considered  to  be  the  consequence  of  their 
business strategy and is not linked to imports from the countries concerned. 

(272)  As  seen  above  in  section  E.2  and  G.4  the  investigation  has  indeed  revealed  a 
heterogeneous picture of the Community industry. Parts of the industry are producing 
unbranded  footwear  in  the  mid-  to  low-end  of  the  product  segment  and  are  selling 
through  wholesalers  rather  than  directly  to  retail.  But  this  does  not  mean  that  these 

EN 

54 

   EN 

 
companies  are  inefficient  by  nature.  What  is  clear  from  the  investigation  is  that, 
irrespective  of  their  competitive  position,  their  difficult  situation  is  being  materially 
caused  by  dumped  imports.  As  a  consequence  they  are  in  an  extremely  difficult 
financial situation and their state has deteriorated sharply during the period considered. 
Many  of  these  companies  are  making  efforts  to  reorient  to  the  mid-  to  high-end 
segment and to change distribution channels but the current pressure cause by dumped 
imports make this development extremely difficult. 

(273)  Notwithstanding  their  marked  improvement  and  adaptation  of  business  model,  those 
companies that have redefined business model do not reach the target profits of 6% as 
established in the original investigation. This shows that also this group is affected by 
the  overall  downward  pressure  exerted  across  all  segments  as  a  consequence  of  the 
dumped imports. It is therefore likely that this group would have been able to recover 
fully  had  they  not  been  faced  with  the  downward  pressure  on  price  caused  by 
continued (and even increased) imports of dumped leather footwear. 

(274)  The  fact  that  even  the  companies  that  have  moved  to  a  new  business  model  are  still 
affected by the injurious dumping despite being highly efficient in terms of pooling of 
resources  and  specialisation,  would  suggest  that  lack  of  efficiency  and  structural 
problems  within  the  industry  is  not  breaking  the  link  between  the  dumping  and  the 
injury sustained. 

5.3.3.  Impact of imports from other third countries 

(275)  Several  interested  parties  have  indicated  that  the  growing  footwear  industry  in  other 
third countries have dramatically increased exports to the Community. In this respect 
it has been claimed that imports from other third countries had significant impact on 
the  situation  of  the  Community  industry  during  the  period  considered  and  would  be 
equally  important  when  analysing  the  likely  continuation  or  recurrence  of  injury 
should  measures  be  discontinued.  According  to  these  parties  the  termination  of  the 
measures  would  affect  the  balance  of  imports  between  imports  from  the  countries 
concerned and imports from other countries since there is substitution between these 
sources.  The  termination  of  measures  would  therefore  have  no  effect  on  the 
Community industry.  

(276)  In this respect the investigation has shown imports from other third countries with low 
prices such as India and Indonesia are large and increasing. The footwear sector is to a 
large  extent  organised  in  international  groups  having  different  production  bases  in 
different  countries.  This  allows  for  a  certain  degree  of  flexibility  to  shift  production 
once a production base is established in other countries. The investigation has shown 
that the establishment in a new country could be done in one to two years  

(277)  In terms of market share, the shares lost by China and Vietnam may have been taken 
over by other exporting countries—in particular by India and Indonesia. However, the 
effect of their prices is not comparable to the effect of prices of imports from China 
and Vietnam. While not taking into account differences in product mix the difference 
in  price  is  particularly  stark  in  the  case  of  India,  where  the  average  export  price  is 
25.8%  higher  than  the  average  export  price  of  shoes  imported  from  Vietnam  and 
40.3% higher than the average export price of shoes imported from China. Therefore 
their effect on the Community industry is significantly less pronounced. The average 
export price of shoes imported from Indonesia is 13.2% higher than the average price 

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of  shoes  imported  from  China  and  comparable  to  the  average  export  price  of  shoes 
imported  from  Vietnam.  Nevertheless  the volumes  of  Indonesian  imports  would  still 
mean  that  their  relative  impact  would  be  limited.  Having  regard  to  the  above,  the 
relative volumes and higher prices of imports from other Asian countries do not allow 
to conclude that their effect would be sufficient to breach the link between the injury 
suffered  by the  Community  industry  and  the large  volumes of dumped imports  from 
China and Vietnam 

5.3.4.  Impact of changes in consumption and consumer preference and impact of changes in 
the structure of the retail sector in the Community 

(278)  It has also been claimed that the poor performance of the Community industry should 
not  be  linked  to  imports  from  the  countries  concerned  but  rather  to  a  decline  in 
consumption  in  the  Community.  This  decline  in  consumption  would  allegedly  be 
linked to changes in fashion trends that have moved from formal towards more casual 
footwear. Accordingly, the consumer has switched  preference  in  favour  of  low  price 
segment typically represented by imports from third countries.  

(279)  In  this  context  the  investigation  has  shown  that  there  has  been  a  decrease  in 
consumption  of  product  concerned.  However,  if  there  had  been  full  substitutability 
between leather shoes and other materials, this decrease would have been much more 
pronounced. The decrease in consumption and changes in consumer preference would 
therefore not on its own appear to be a factor that would break the causal link. 

(280)  The  investigation  has  also  shown  that  the  retail  of  shoes  has  diversified  from  the 
traditional shoe shop to a number of new outlets including department stores, general 
apparel  shops  as  well  as  super/hyper  markets,  which  account  for  a  very  significant 
amount of sale, possibly exceeding 40%.  

(281)  It  has  also  been  argued  that  this  highly  competitive  scenario  exerts  a  downward 
pressure  on  prices  and  that  this  effect  has  had  a  higher  impact  on  the  Community 
industry than the dumped imports. While pressure from the retail sector as such cannot 
be  ruled  out  as  a  factor  that  may  have  had  an  impact  on  the  Community  industry  it 
must  however  be  borne  in  mind  that  also  this  structure  is  dependent  on  finding 
suppliers that can supply at such low  prices.  The large  volumes of dumped products 
have  most  certainly  been  a  key  factor  in  developing  and  maintaining  this  price 
pressure. Furthermore, give the fact that  the  Community  producers  have  managed  to 
increase prices would also indicate that the impact of the changes in the retail structure 
is not such as to break the link between the injury and the dumped imports. 

5.3.5.  Impact of the Community producers' export performance 

(282)  The poor export performance of the Community industry linked to the strength of the 
EURO  against  the  USD  was  also  put  forward  as  a  cause  of  injury  suffered  by  the 
Community  industry  and  that  therefore  as  such  had  to  be  distinguished  from  the 
effects of imports from the countries concerned.  

(283)  However,  a  comparison  of  overall  domestic  prices  with  overall exports  would  rather 
suggest that the export prices of Community producers have gone up by around 12% 
in the period considered and that these prices, during the RIP were around 20% higher 
than the domestic prices. Export volumes have remained stable and absorb ca. 25% of 

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production. Considering that the investigation has shown that the export performance 
of Community producers has only seen a small decrease the argument that that export 
performance would be the cause of injury to the Community can not be sustained.  

5.4.  Conclusion on impact of other factors 

(284)  As seen from the above, several interested parties have claimed that factors other than 

the dumped imports have been the major cause of injury to the Community industry. 

(285)  The relevant other factors have been identified and carefully analysed. However, the 
facts  of  the  case  show  that  none  of  the  other  known  factors  in  isolation  or  seen 
together would be such as to break the causal link between the  dumped imports and 
the injury suffered by Community producers 

H. LIKELIHOOD OF CONTINUATION OF INJURY 

Impact of the projected volume and price effects in case of repeal of measures on 

1. 
the state of the Community industry  

(286)  In  accordance  with  Article  11(2)  of  the  basic  Regulation,  imports  from  countries 
currently being reviewed were assessed in order to establish if there was a likelihood 
of continuation of injury. 

(287)  With  regard  to  the  likely  effect  on  the  Community  industry  of  the  expiry  of  the 
measures  in  force,  the  following  factors  were  considered  in  line  with  the  elements 
summarised above in respect of the likelihood of continuation of dumping.  

1.1. 

The PRC 

(288)  As concluded above in recital (261)-(262), imports of large volumes at dumped prices 

from the PRC have continued during the RIP.  

(289)  An analysis of capacities and the development of the domestic market in the PRC also 
revealed that this already high volume of exports would continue should measures be 
terminated. Even in the event that imports, as alleged, would decrease by up to 30% as 
a consequence of the market downturn, the volumes would still be very large.  

(290)  It was also concluded that, due to its higher price level, when compared to the Chinese 
domestic  market  as  well  as  other  third  country  markets,  the  Community  would 
continue to be an attractive market for Chinese exports should measures be allowed to 
lapse.  While  a  certain  increase  in  export  price  could  not  be  ruled  out  it  was 
nevertheless concluded that these exports would continue to be dumped.  

(291)  The significant levels of dumping and undercutting observed indicate that the export 
volumes to the Community mentioned above would be made at dumped prices which 
would lie significantly below the prices and costs of the Community producers. 

(292)  The combined effect of such volumes and prices would as such be capable to lead to a 
deterioration  of  the  situation  of  the  Community  producers'  already  precarious 
situation.  

1.2.  Vietnam 

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(293)  Also  for  the  case  of  Vietnam,  continuation  of  dumping  in  large  volumes  was 

established in the RIP.  

(294)  It  was  also  concluded  that  that  the  Community  continues  to  be  the  most  important 
market for the Vietnamese exporters and that this is likely to continue to be the case in 
the event that measures are discontinued.  

(295)  Considering  the  existence  of  significant  spare  capacities  and  when  considering  the 
price  level  in  the  Community  when  compared  to  that  in  the  Vietnamese  domestic 
market as well as other export markets, it is likely that the imports of dumped products 
will increase further should measures lapse. As is the case for China, even in the event 
that imports, as alleged, would decrease as a consequence of the economic downturn 
the import volumes would still be very significant.  

(296)  As in the case of the PRC, the significant level of dumping and undercutting observed 
indicates that the export volumes to the Community mentioned above would be made 
at  dumped  prices  which  would  lie  significantly  below  the  prices  and  costs  of  the 
Community  producers.  Similarly,  the  combined  effect  of  such  volumes  and  prices 
would  as  such  be  capable  to  lead  to  an  deterioration  of  the  Community  producers' 
already precarious situation 

2. 

Arguments raised by parties 

(297)  A number of interested parties have put forward claims that other factors than dumped 
imports  from  the  countries  concerned  would  put  into  question  the  likely  effect  of 
dumped imports on the situation of the Community industry in the future.  

(298)  The  factors  brought  forward  are  to  a  large  extent  already  addressed  in  the  injury 
section G.5 and would therefore not need to be repeated in this section. Some of the 
arguments  have,  however,  been  linked  to  post-RIP  events  and  have  therefore  been 
subject to additional analysis in terms of their likely future impact.  

2.1. 

Likely effect of the market downturn 

(299)  Several  parties  have  held  that  the  effects  of  the  economic  downturn  should  be 
distinguished  from  the  alleged  effects  of  imports  as  this  event  must  be  considered 
external to the likelihood of continuation/recurrence of injurious dumping. According 
to these interested parties, the Community industry would be particularly affected by 
the downturn as the consumer in such circumstances would typically switch to a lower 
quality/price product as a consequence of the decrease in purchase power. 

(300)  The market downturn will most likely lead to a further decrease in consumption of the 
product concerned. While leather shoes still will have a strong position in the market, 
sales are likely to go down significantly more than the 7% already seen in the period 
before the downturn. 

(301)  It  is  likely  that  the  economic  constraints  will  make  consumer  and  retailers  more 
sensitive to price and a decrease in purchasing power of the consumer could put a cap 
on prices at retail level. In turn this could trigger a segment shift (consumers moving 
from  the  high/medium  segment  to  medium  as  well  as  from  the  medium  to 
medium/low)  and  to  more  repairs.  The  competition  between  leather  shoes  and  other 

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cheaper products made of textile and synthetics would under such circumstances most 
likely increase. 

(302)  In short, it cannot be ruled out that the downturn in the market will contribute to the 
deterioration of the situation of the Community industry given the related consumption 
and  price  effects.  At  the  same  time  however  it  is  also  likely  that  the  economic 
downturn will magnify the effect of dumped imports even further. The reason for this 
is  that  the  downturn  is  likely  to  put  price  pressure  on  all  operators,  including  the 
exporters from the countries concerned, which may lower their already dumped prices 
even further. Even lower prices will put pressure also in the mid to high segment and 
would risk forcing Community producers back towards the mid to low segment. This 
in  turn  would  lead  to  even  fiercer  product  competition  between  Community 
production and the dumped imports.  

2.2. 

Likely impact of changes in Consumption patterns 

(303)  Several  interested  parties  claimed  any  future  decline  in  the  performance  of  the 
Community  industry,  if  any,  would  not  be  linked  to  imports  from  the  countries 
concerned  but  rather  to  a  decline  in  consumption  in  the  Community.  This  decline  in 
consumption would allegedly be linked, not only to changes in fashion trends that has 
moved  from  formal  towards  more  casual  footwear  but  also  to  the  downturn  in  the 
market. This event would increase the tendency of the consumer to switch preference 
in favour of low price segment typically represented by imports from third countries 

(304)  A drop in overall consumption would in all likelihood have a detrimental effect on the 
performance  of  the  Community  producers.  It  can  however  also  be  expected  that  a 
decrease in purchasing power of the consumer will make the market less responsive to 
short term fashion-trends leading to a revival of the classical 'brown shoe' which is the 
segment where the Community industry is the strongest. It can thus not be concluded 
that  a  drop  in  consumption  would  hit  Community  produced  shoes  harder  than  those 
imported. Overall, while Community producers most likely will be affected by a drop 
in  consumption  the  effect  of  large  volumes  of  dumped  imports  from  the  countries 
concerned will still be a very significant cause of injury should measures be allowed to 
lapse. 

2.3. 

Likely impact of drop in export performance 

(305)  It has also been argued by some interested parties that the economic downturn will be 

particularly hard felt on the export side in the Community production.  

(306)  In this context it can be presumed that the financial downturn, which will be felt across 
the  world,  will  also  have  an  impact  on  EU  exports.  While  a  drop  in  export  activity 
could certainly contribute negatively to the general development of the sector it should 
however be born in mind that that three quarters of the Community producers' activity 
is geared to the domestic EU market. Considering this, it cannot be concluded that the 
likely  impact  of  the  downturn  of  the  export  performance  in  itself  would  break  the 
causal link between dumped imports and injury caused to the Community producers. 

2.4. 

Likely impact of structural problems and lack of efficiency amongst EU producers 

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(307)  It has also been argued that Community producers have had problems benefiting from 
measures in the past due to the fact that the source of the problems suffered are linked 
to  structural  problems  and  inefficiency  in  the  industry  rather  than  to  the  alleged 
dumping  from  China  and  Vietnam.  According  to  these  claims,  the  event  of  the 
economic downturn will deepen the structural problems in the sector and further dilute 
the link between the injury suffered and the dumping.  

(308)  First and foremost it is recalled that the investigation has shown that, irrespective of 
their competitive position, Community producers have been materially injured by the 
imports of dumped imports. In any event, it should be noted as demonstrated above, 
that the Community industry while still in a precarious situation has shown at least a 
partial  recovery  in  the  period  considered  and  have  been  able  to  maintain  a  stable 
market  share.  Moreover  a  large  part  of  the  sector  has  been  able  to  redefine  business 
model or is trying to through (i) the grouping of resources in clusters making the most 
of specialisation and allowing the groups to benefit from economies of scale, (ii) the 
direct  sales  to  retailers  and  (iii)  the  production  of  shoes  in  the  mid-upper  and  upper 
segments. It is highly unlikely that the industry would have been able to carry though 
with this process had the measures not been in place and in any case those which are 
now in the process of changing their business model will in all likelihood not be able 
to complete it.  

(309)  It can however also be expected that the market downturn will increase pressure and 
possibly also halt the process for the companies that have still not been able to refocus 
by  way  of  a  change  in  business  model.  The  situation  of  these  companies  will  risk 
deteriorating even further and many companies in this group may even be going out of 
business  as  competition  intensifies.  The  companies  that  have  adopted  the  more 
advanced business models are not likely to escape the effects of the market downturn 
either as the prices in the high/medium segment in which they are specialised, also is 
likely to be subject to an overall downward pressure.  

(310)  Nevertheless,  as  for  the  assessment  of  the  situation  seen  in  the  period  considered,  it 
would be difficult to argue that, on its own, the event of the economic downturn would 
break  the  causal  link  with  dumped  imports.  On  the  contrary,  as  detailed  above  in 
recital  (302)  downward  pressure  on  price  sustained  by  cheap  dumped  imports  will 
most  likely  also,  generate  a  domino  effect,  forcing  an  even  larger  share  of  the 
Community  production  towards  the  same  segment  as  the  dumped  imports  so  as  to 
increase  the  pressure  of  the  dumped  imports  on  Community  producers.  Under  such 
circumstances Community producers would therefore be more dependent than ever on 
the existence of measures in the future.  

2.5. 

Likely effects of imports from third countries 

(311)  It was also examined whether imports from third countries would be likely to have an 
impact on the effects of dumped imports on the situation of the Community industry 
should  measures  allow  to  lapse.  In  this  context  it  has  been  held  that  third  countries 
exports  to  the  Community  have  been  constantly  growing  and  that  in  the  wake  of 
higher  costs  in  China  and  Vietnam  and  coupled  with  the  economic  downturn,  these 
would be the main cause of concern to the Community in the future.  

(312)  Bearing in mind the price difference between the dumped imports from the countries 
concerned and those of third countries it would however rather be likely that Chinese 

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and Vietnamese exports will gain a price edge over imports from other third countries. 
This  would  in  turn  point  to  a  relative  decrease  of  such  imports  in  the  future.  As 
demonstrated  above  in  sections  C.3  and  C.4  there  are  no  signs  that  the  Chinese  or 
Vietnamese exporters are likely to withdraw their presence on the Community market. 
On the contrary, the large capacities at hand would suggest they have an incentive to 
stay in the market as long as possible. 

(313)  In view of the above, imports from other third countries would in all likelihood have 

less of an impact on the situation of the Community industry should measures lapse. 

2.6. 

Likely impact of fluctuations in exchange rates 

(314)  It  has  also  been  argued  that  the  injury  to  the  Community  producers  is  likely  to 
decrease as a result of the appreciation of the USD  to  the  EURO.  The fluctuation in 
currency would push up the prices of the dumped imports that are traded in Euro so as 
to close the price gap between the dumped imports and Community producer prices. 

(315)  In this context it should be noted that that the investigation has to establish whether the 
dumped imports (in terms of prices and volume) have caused (or are likely to cause) 
material  injury  to  the  Community  industry  or  whether  such  material  injury  (or 
likelihood thereof) was  due  to other  factors. In this respect, Article  3(6) of  the basic 
Regulation  states  that  it  is  necessary  to  show  that  the  price  level  of  the  dumped 
imports cause (or are likely to cause) injury. It therefore merely refers to a difference 
between price levels, and there is thus no requirement to analyse the factors affecting 
the level of those prices. 

(316)  The  likely  effect  of  the  dumped  imports  on  the  Community  industry's  prices  is 
essentially  examined  by  establishing  price  undercutting,  price  depression  and  price 
suppression. For this purpose, the dumped export prices and the Community industry's 
sales  prices  are  compared,  and  export  prices  used  for  the  injury  calculations  may 
sometimes need to be converted into another currency in order to have a comparable 
basis.  Consequently,  the  use  of  exchange  rates  in  this  context  only  ensures  that  the 
price  difference  is  established  on  a  comparable  basis.  From  this,  it  becomes  obvious 
that the exchange rate can in principle not be another factor of the injury. 

(317)  The  above  is  also  confirmed  by  the  wording  of  Article  3(7)  of  the  basic  Regulation, 
which refers to known factors other than dumped imports. The list of the other known 
factors in this Article does not make reference to any factor affecting the price level of 
the dumped imports. 

(318)  However, even in the event that this factor were taken into account, given the likely 
pressure on consumer prices in a context of a market downturn, it is unlikely that that 
importers  buying  from  the  countries  concerned  would  be  able  to  increase  prices  to 
retail as a result of the appreciation of the USD. Furthermore, exchange rates as such 
are very difficult to predict and a depreciation of the USD against the Euro has been 
seen post IP making it impossible to conclude that that the currency fluctuations will 
have an upwards effect on prices of dumped imports from the countries concerned. 

(319)  In view of the foregoing it cannot be concluded that the development of exchange rate 

could be another factor causing injury. 

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3. 

Conclusion on the likely impact of other factors 

(320)  As seen from the above, while it cannot be ruled out that other factors including the 
economic  downturn  will  have  an  effect  on  the  financial  situation  of  the  Community 
producers the investigation has not shown that on their own they would break the link 
between  the  dumped  imports  and  the  continued  injury  that  the  Community  industry 
would suffer. 

I. CONCLUSION ON THE CONTINUATION OF INJURY 

(321)  As  established  above  in  section  G4,  the  investigation  has  shown  that  the  injurious 
situation  of  the  Community  industry  has  continued  in  the  RIP.  The  continuation  of 
injury is according to art 11.2 of the Basic Regulation in itself a strong indicator that 
injury  is  likely  to  also  continue  in  the  future  which  would  suggest  that  measures 
should be kept in place.  

(322)  The  findings  pertaining  to  imports  shows  that  imports  of  large  volumes  at  dumped 
prices  are  likely  to  continue  and  that  price  pressure  (not  least  in  the  context  of  the 
economic  downturn)  is  likely  to  intensify  the  competition  between  dumped  imports 
and  Community  produced  leather  shoes.  The investigation  has  also  shown  that  there 
would be no other known factors that would break the strong link between the dumped 
imports and the injury Community producers would suffer. 

(323)  An overall analysis of the findings in the investigation indicates that the consequence 
of  the  lifting  of  measures  would  likely  lead  to  continuously  large  and  possibly 
increased  volumes  of  imports  from  both  China  and  Vietnam  at  prices  which  would 
even further undercut those of the Community industry. The market downturn would 
most likely further exacerbate this development. The dumped imports would therefore 
most  likely  have  significant  detrimental  effects  on  the  Community  industry.  Under 
such circumstances the Community industry would either have to follow the decrease 
in prices in order to maintain market share, or maintain sales prices at current levels 
and  instead  lose  customers  and  eventually  sales.  In  the  former  case,  the  Community 
industry would have to operate at a loss and in the latter case the loss of sales as such 
would eventually lead to increased costs followed by losses.  

(324)  Moreover,  the  Community  industry  has  suffered  the  effects  of  dumped  imports  for 
many years and is currently in a precarious economic situation. However, it has also 
been established that a large part of Community producers have been able to redefine 
their business models, concentrating on higher added value, mid to high end product 
segment and with more streamlined distribution channels. This group is also gradually 
absorbing  the  activity  of  part  of  industry  that  has  not  yet  been  able  to  adjust  and 
implement new business models and a further adjustment period would be needed to 
complete this change-over across the entire industry.  

(325)  Should the measures be terminated at this sensitive stage, the situation of Community 
producers would deteriorate and the process of moving to a new business model would 
be  likely  halted  and  the  very  existence  of  a  large  part  of  the  industry  would  be 
jeopardized. 

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(326)  Therefore the investigation has revealed that there is, due to imports from both China 
and Vietnam, a clear likelihood of continuation of injury to the Community industry 
for the short/medium term, until the process of adjustment has been completed. 

J. COMMENTS FROM INTERESTED PARTIES FOLLOWING DISCLOSURE 

(327)  A number of comments were received following disclosure of the findings. However, 
none of these were such to alter the conclusions. The main arguments raised were as 
follows. 

1.  Comments  received  pertaining  to  formal,  procedural  and  rights  of  defence  matters

1.1 

Confidentiality of the names of the complainant 

(328)  Several  interested  parties  repeated  their  concerns  as  to  the  confidentiality  treatment 
granted  to  the  complainant, claiming that there was no trace in the file in support of 
the  allegation  that  the  situation  of  the  complainant  would  be  impeded  should  their 
identity  be  disclosed.  One  interested  party  added  that  in  order  not  to  be  disclosed, 
WTO  practice  would  require  that  good  cause  be  demonstrated  for  all  documents, 
whether considered confidential by nature or not. According to this party no such good 
cause had been shown in this case.  

(329)  The same party also argued that should the request for confidentiality nevertheless be 
granted,  this  should  in  turn  mean  that  at  least  the  full  details  on  unit  price  and 
profitability indicators of the sample could be disclosed. 

(330)  As  indicated  in  recitals  (40)-(42)  the  confidentiality  concerning  the  identities  of  the 
complainant and the producers selected for the sample was based on a duly justified 
request further to Article 19 in the Basic regulation. It is therefore not correct that due 
cause  was  not  demonstrated  by  the  complainant.  As  concerns  the  argument  that  full 
details of unit price and profitability should be disclosed it is maintained that this, seen 
in  context  with  publicly  available  information,  could  indirectly  reveal  the  identity  of 
the  complainant.  Moreover  within  the  group  of  the  sampled  companies,  such 
disclosure would affect the commercial interests of the other sampled companies that 
are also competitors on the market.  

(331)  In  view  of  the  above,  the  comments  received  would  not  be  such  as  to  alter  the 
conclusion to grant confidential treatment to the identity of the Community producers 
supporting the request. 

1.2 

Definition of Community industry and standing 

(332)  Several  interested  parties  argued  that  the  Commission  had  applied  the  definition  of 

Community industry and Community production incorrectly.  

(333)  Two parties claimed that an injury assessment has to be based on information on the 
complainant  and  supporters  of  the  complaint  and  not  on  the  basis  of  the  total 
community  production.  According  to  these  parties,  this  meant  that  the  macro 
indicators used were not representative.  

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(334)  It was also held that the Commission had failed to exclude from the sample a company 
that  had  discontinued  production  in  the  Community  in  the  RIP.  Some  parties 
maintained  that  the  inclusion  of  this  company  had  distorted  the  micro  indicators  as 
well  as  the  undercutting  and  underselling  analysis.  Conversely,  another  interested 
party that did not object to the inclusion in the sample of this party, held that all data 
of this company and not only that relating to its activity in the Community should be 
taken into account for the injury analysis. 

(335)  The same  interested parties claimed that the Commission had failed to exclude from 
the definition of Community industry companies that imported up to 25% of the total 
production from third countries. According to these interested parties this constituted a 
change  in  methodology  when  compared  to  recital  231  of  the  regulation  imposing 
provisional  measures  in  the  original  investigation,  stipulating  that  all  companies  that 
had  delocalised  had  been  excluded.  It  was  also  claimed  that  Commission  practice  in 
general  as  concerned  the  application  of  article  4.1  of  the  basic  Regulation,  would 
require the exclusion of companies that import around of 25% of the total production. 
In  this  context  one  party  also  claimed  that  the  Commission  had  wrongly  concluded 
that  none  of  the  CEC  members  had  outsourced  production  even  when  a  submission 
showing the contrary had been submitted in the course of the investigation. 

(336)  Several  interested  parties  also  indicated  that  the  general  disclosure  document  was 
inconsistent  as  recital  3  indicated  that  the  support  for  the  complaint  was  35%,  while 
recital (193) indicated 25%.  

(337)  As seen above in recital (193)- (200) Community industry was defined as provided for 
in art. 4.1 of the Basic Regulation. The Commission considers that an assessment of 
the situation of the entire Community production complies with the Basic Regulation. 
The  argument  that  the  injury  assessment  was  based  on  an  incorrect  definition  of  the 
Community industry must thus be rejected. 

(338)  As  to  the  failure  of  the  Commission  to  exclude  one  of  the  sampled  companies,  it  is 
recalled that recital (23) and (196) provides the reasons why the company should be 
retained in the sample. It further concluded that a possible exclusion would not have 
any  effect,  on  standing  or  on  the  injury  situation,  including  undercutting,  of  the 
sample. This was due to the very small weight of this company in the sample. Whether 
the company is formally excluded or not has therefore no practical implications on the 
outcome of the analysis. 

(339)  As seen in recital (195), Community production was based only on companies that fall 
under the definition of Article 4 (including 4.1). Based on the information on record, 
no  legal  entities  were  taken  into  account  that  had  delocalised  and  that  should  have 
been  excluded  from  the  definition  of  Community  producer  under  Article  4.1.  In  this 
context  it  is  recalled  that  limited  imports  as  such  do  not  amount  to  delocalisation. 
While a small number of complaining producers did import, these volumes were very 
limited and in any event at most 25% of the total output of the company concerned. In 
view of the foregoing the claim that the Commission has deviated from the practice in 
the original case or from the provisions of the basic Regulation is not correct. 

(340)  As  to  the  alleged  inconsistency  between  the  figure  of  support  of  the  complaints 
mentioned in recitals 3 and(193), it should be noted that recital (193) simply states that 

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the  support  is  over  and  above  the  legal  minimum  of  25%  and  is  therefore  not  an 
indication of the actual support over and above this threshold. 

1.3 

Period for assessment of injury 

(341)  Several interested parties claimed that the period for assessing injury was incoherent. 
In  particular,  it  was  held  that  using  the  period  under  consideration  for  certain 
indicators,  while  referring  back  to  the  OIP  and  to  2005  for  other  injury  indicators, 
would  lead  to  an  inconsistent  result.  Other  interested  parties  claimed  that  the 
Commission had relied on data for 2005 and the OIP without disclosing these data. 

(342)  The  assessment  of  the  injury  analysis  was  based  on  the  findings  in  the  period 
concerned i.e. from 2006 up to and including the RIP. References to the OIP and 2005 
were made only to complement the analysis but did not have a decisive impact on the 
conclusions. In view of the foregoing the claim that the period for assessing injury led 
to an inconsistent analysis will have to be rejected. 

1.4 

Representativeness of the sample of Community producers  

(343)  Several  parties  maintained  that  the  sample  of  Community  producers  was  not 

representative in term of product types, size and geographical spread.  

(344)  In  this  context  it  was  held  that  the  Commission  had  not  given  sufficient  explanation 
for  the  geographical  spread  of  the  sample  and  that  this  in  any  event  was  not 
representative as footwear is produced in at least 7 Member states out of which only 
four  were  part  of  the  sample.  In  addition  it  was  claimed  that  one  Member  state  in 
particular  was  overrepresented.  One  interested  party  also  requested  that  the 
Commission  provided  information  on  the  level  of  tolling  arrangements  found  with 
Community industry.  

(345)  One  party  also  claimed  that  women's  shoes  were  overrepresented  in  the  sample  and 
another  party  recalled  that  the  profitability  of  the  sample  was  unrepresentative  when 
compared to the figure deduced from the complaint.  

(346)  Recital  (28)  provides  details  of  the  geographical  spread  of  the  sample  and  its 
representativeness  as  compared  with  the  overall  spread  in  the  Community.  In  this 
context  it  is  recalled  that  the  sample  largely  mirrored  the  geographical  spread  of  the 
entire  population  and  that  an  exactly  identical  geographical  spread  would  not  be 
necessary.  Furthermore,  the  investigation  revealed  that  around  60%  of  the  sample 
production was made through so-called "subcontracting" or "tolling" arrangements. 

(347)  In  addition,  as  such  "subcontracting"  or  "tolling"  occurs  also  amongst  companies  in 
different Member States, care was taken to ensure that production was allocated to the 
Member state of the company that had ordered the service. 

(348)  Considering the foregoing, a degree of variation as to the weight of one Member State 
will not render the sample unrepresentative. Similarly, considering the subcontracting 
arrangement  and  the  fact  that  two  thirds  of  the  production  is  concentrated  in  three 
Member  States,  there  can  be  no  requirement  to  include  representatives  from  7 
producing countries. 

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(349)  It  is  recalled  from  recital  (29)  that  the  sampled  community  producers  were  found  to 
include  a  cross-section  of  product  ranges  which  largely  reflected  that  of  the  overall 
population.  The  same  holds  true  for  the  gender  division  and  although  there  are 
variations  in  all  categories,  men,  women  and  children's  shoes  are  sold  in  significant 
quantities by the sampled companies as well as by the overall population. As concern 
the  profit  level,  the  fact  that  there  is  a  variation  between  the  sample  and  that  of  the 
request does not render the sample unrepresentative. In any event, it should be noted 
that  the  profitability  of  the  sample  is  in  the  same  range  as  the  one  established  when 
analysing all information in the complaint.  

1.5 

Duty level in the original investigation 

(350)  Some  parties  argued  that  China  has  been  discriminated  vis-à-vis  Vietnam  already 
since the original case, because a higher duty was applied on Chinese imports although 
the dumping margin established for China was lower than the one for Vietnam. It was 
also  claimed  that  China  was  discriminated  against  by  the  method  used  to  adjust  the 
injury margin in the original investigation. 

(351)  First,  it  is  law  in  the  EU  that  duties  are  established  in  line  with  the  lesser  duty  rule, 
which means  that the  injury margin  may  be setting the duty, instead of the dumping 
margin.  Second,  in  the  original  case  it  was  found  necessary  in  order  to  impose  the 
lowest  possible  remedy  of  injurious  dumping  to  take  into  account  non-injurious 
volumes  and  values,  which  were  calculated  to  arrive  to  the  lowest  possible  level  of 
remedy of injury caused by both China and Vietnam, and which resulted in the duties 
imposed. In this context, it is recalled that the purpose of an expiry review is to assess 
whether the facts at hand would warrant that measures in their current form be kept in 
place for a further period. Considering that there is no scope for change in the level of 
measures  in  the  context  of  this  review,  arguments  to  this  effect  cannot  be  taken  into 
account.  

1.6 

Duration of measures  

(352)  Several interested parties questioned the basis for the limitation of the duration of the 

measures.  

(353)  In this context, a further justification and clarification has been added to recital (523)-

(524) of the working document 

2. Comments received pertaining to the injury analysis  

2.1 

Cumulation of Chinese and Vietnamese imports  

(354)  One  interested  party  claimed  that  the  conditions  for  cumulation  were  not  fulfilled  as 
the  trend  concerning  Vietnam  was  very  different  from  that  of  China.  It  was  also 
claimed that imports from Vietnam could no longer be considered to cause injury as 
the volumes in the RIP were below those of the non-injurious volumes as established 
in the original investigation.  

(355)  It  is  recalled  that  an  extensive  analysis  was  carried  out  above  in  recital  (216)  and 
onwards showing that the conditions for cumulation were met. In view of this fact, the 
argument on the non injurious volume is not relevant. 

2.2 

Effect of outsourcing 

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(356)  One  interested  party  indicated  that  the  disclosure  document  showed  that  the 
Community  industry  is  continuing  to  delocalise.  According  to  these  parties,  this 
showed that the duties in place had not been able to stop the delocalisation process. 

(357)  In this context it is recalled that the purpose of the duties is not to stop or promote any 
delocalisation process, but to correct trade distortions caused by dumped imports. It is 
also to be noted that several companies have delocalised to other Member States or to 
third countries which are not under measures. In view of the foregoing, this argument 
cannot be taken into account. 

2.3 

Impact of the Macro indicators 

(358)  One  interested  party  considered  that  responses  from  national  associations  were  not 
sufficient as a source for injury indicators since only information pertaining to some of 
the injury indicators could be deduced from some of their responses. The fact that only 
nine responses were obtained, was also challenged. 

(359)  Several parties challenged the macro indicators due to the fact that these were based 
on  Community  production  as  a  whole  rather  than  on  information  from  complainants 
and  supporters.  The  justification  for  the  establishment  of  the  macro  indicators  were 
already  explained  above  in  recital  (337)  and  would  therefore  require  no  further 
assessment. One interested party indicated that the macro indicators in any event were 
not reliable. The fact that an increase of employment of 359% had been seen since the 
original investigation was given as an example of why the figures had to be considered 
unreasonable.  This  claim  was  supported  by  the  observation  showing  that  the  macro 
indicators on several occasions were different from those observed in the sample. 

(360)  Several  interested  parties  indicated  that  the  consumption  trends  disclosed  were 
incoherent  as  one  part  of  the  document  mentions  a  decrease  of  7%  while  a  14% 
decrease  is  mentioned  in  another  part  of  the  document.  Similarly,  the  data  on 
production capacity and the data on employment were considered inconsistent as these 
showed different trends even if the disclosure document concluded that the two were 
linked. 

(361)  As  to  the  sources  and  as  explained  above  in  recital  (225)-(226),  the  Commission 
requested and obtained from national associations the information that was reasonably 
at  their  disposal.  The  fact  that  this  does  not  cover  all  injury  indicators  is  no  way  an 
anomaly,  but  rather  a  reflection  that  such  bodies  simply  do  not  have  access  to  data 
pertaining to some specific indicators. This is why the investigating authority obtains 
such data from a representative sample of companies. The nine replies obtained from 
the  national  associations  account  for  a  large  majority  of  production  (above  80%  of 
total Community production) and were further complemented from available statistical 
information and other data provided by interested parties. 

(362)  Concerning the level of employment it is recalled that in the original investigation, the 
figure  of  57,000  workers  was  based  on  the  complainants'  figures.  The  current 
employment  figure  of  262,000  is  a  macro  indicator  and  pertains  to  the  Community 
Industry as defined above. As for the differences between the indicators for the sample 
and for the whole Community Industry, it is recalled that those indicators do not need 
to  perfectly  mirror  each  other  to  be  representative.  The  fact  that  they  followed  the 
same  trends  further  attest  to  their  representativeness.  As  to  the  alleged  inconsistency 

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for the consumption, the 7% decrease refers to the period 2006 – RIP while the 14% 
decrease refers to the period 2005 – RIP. 

(363)  In view of the above, the comments with regard to the composition and the analysis of 

the macro indicators must be rejected. 

2.4 

Impact of micro indicators  

(364)  One interested party indicated that the 3% profit reached by the Community industry 
should be considered as a good result, in particular when considering that the market is 
contracting. It was also indicated that the claim that the Community industry is facing 
price  pressure  from  the  Chinese  and  Vietnamese  was  not  supported  by  the  findings 
that the Community industry managed to raise prices by 30% in the period considered.  

(365)  As established in the original investigation, the profit level expected in the absence of 
injurious  dumping  is  6%,  well  above  the  ca.  3%  level  achieved  by  the  Community 
industry, which is furthermore not high enough to assure the viability in the medium 
term and to finance the ongoing restructuring process This is also to be compared with 
the  very  healthy  profit  level  of  importers.  As  for  the  Community  Industry's  sales 
prices,  their  increase  did  not  prevent  direct  competition  between  the  products  and 
therefore  undercutting  and  underselling  have  been  affected.  The  low  profit  margin 
proves the price pressure, as the Community industry cannot apply a higher mark-up.  

(366)  In view of the above, the arguments with regard to the analysis of the micro indicators 

must be rejected. 

2.5 

Undercutting analysis 

(367)  Several interested parties indicated concerns as to the undercutting analysis carried out 
by  the  Commission.  In  this  context  it  was  held  that  the  Commission  had  artificially 
increased  the  matching  of  product  control  numbers,  PCN's  by  a  reclassification  of 
certain shoes from product group E to A.  

(368)  Several interested parties considered that the Commission had failed to disclose why 
the level of adjustment for R&D as established in the original investigation had now 
been decreased. Similarly, it was considered that the Commission had not disclosed to 
which extent adjustments had been made for sales to unrelated trading companies. . 

(369)  The  claim  that  an  artificial  matching  was  obtained  through  a  reclassification  to  the 
PCN's  is  not  correct.  As  detailed  in  (57)  and  onwards  there  was  no  re-classification 
however, where appropriate, a correction had to be done when parties had declared the 
shoes in the wrong category. 

(370)  In  respect  of  the  claim  that  no  justification  was  given  for  the  change  in  the  R&D 
adjustment, it should be noted that this was established using the same method as in 
the  original  investigation,  i.e.  on  the  basis  of  verified  information  supplied  by  the 
cooperating  parties  which  refers  to  the  RIP.  The  CIF  price  of  the  exporters  was 
established based on data provided by the companies themselves and corrected where 
necessary. 

(371)  In view of the above, the claims that the undercutting analysis was deficient must be 

rejected. 

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2.6 

Conclusion of continuation of injury 

(372)  Several  interested  parties  claimed  that  the  overall  injury  indicators  were  all  positive 
and that the Commission had based the conclusion of continuation of injury solely on 
the  profitability.  Moreover,  considering  the  fact  that  the  profitability  in  the  RIP  was 
the highest since 2001, also this indicator should have to be interpreted as indicating 
that  the  Community  industry  is  no  longer  suffering  injury.  Several  interested  parties 
did furthermore name and provide specific example of companies that were doing well 
in support of their claim that Community industry was not injured. 

(373)  Another  interested  party  considered  that  the  Commission  had  failed  to  take  into 
account the impact of change in the business model when assessing the production and 
sales as well as the injury picture in general. It was similarly claimed that the effects of 
outsourcing  had  not  been  taken  into  account  and  according  to  this  party  the  average 
profit of the sample would have been much higher had the outsourced activities been 
taken into account. 

(374)  In this context, it is underlined that the analysis of injury indicators is global by nature 
and  not  all  indicators  have  to  show  deterioration  in  order  for  injury  to  be  found.  It 
should also be taken into consideration that measures were in force during the period 
analysed,  and  that  therefore  a  certain  mitigation  of  the  injury  is  to  be  logically 
expected.  This  notwithstanding  and  as  already  established  in  recital  (257)  and 
onwards,  consumption,  production,  sales  ,capacity  utilisation  showed  a  deterioration 
over  the  period,  undercutting  and  underselling  continued  at  significant  levels,  and 
profitability  remained  at  very  low  levels,  substantially  below  the  normal  profit  to  be 
expected in the absence of injurious dumping. Together, the picture showed a partial 
removal of injury by the measures—but by no means its disappearance.  

(375)  In an industry with over 18,000 companies, it is natural that there will be a spread in 
the performance of individual companies however, his does not imply that injury does 
not exist for the industry as a whole. It is recalled that the analysis of macro indicators 
for  the  whole  industry  and  micro  indicators for a representative sample of producers 
(both as per art. 4.1 of the Basic Regulation), showed that injury had continued. 

(376)  As concern the impact of the change in business model, the calculated average profit 
refers  to  the  sampled  Community  producers.  All  the  changes  (i.a.  business  model, 
level of trade) were been included in the analysis. As per the requirements of the law, 
an operator’s activity as an importer can not be ascribed to its situation as producer.  

(377)  In  view  of  the  foregoing,  the  conclusions  on  injury  as  established  in  recitals  (257)-

(260) remain unchanged. 

3.  Comments  received  pertaining  to  the  causal  link  between  the  injury  sustained  by 
Community industry and the imports of dumped imports from the countries concerned 

(378)  Several  interested  parties  considered  that  the  Commission  had  failed  to  consider  the 
full impact of other causes on the financial viability of the Community producers. In 
general it was claimed that the Commission had taken an isolationist approach to the 
impact of other causes. In this context it was held that the assessment of each issue in 
isolation had meant that all effects except the one assessed at the time, were attributed 
to the dumped imports. 

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(379)  Several  interested  parties  considered  that  the  Commission  had  under-estimated  the 
impact of imports from other third countries. According to these parties the weighted 
average  price  of  imports  from  third  countries  was  only  0,  39€  higher  than  those  of 
China  and  Vietnam  and  would  therefore  have  a  significant  impact  on  Community 
industry. It was also indicated that had the comparison been based on landed values, 
rather  the  CIF  values,  the  prices  of  imports  from  in  particular  India  and  Indonesia 
would be lower than those of the countries concerned. 

(380)  Several parties claimed that the Commission had failed to justify the conclusion that 
there  was  competition  between  the  product  concerned  imported  from  the  PRC  and 
Vietnam and that produced in the Community. It was also claimed that this conclusion 
would  be  contradictory  as  several  sections  in  the  disclosure  document  had  described 
how  the  Community  industry  is  concentrated  to  the  mid  to  high  end  segment.  This 
finding was considered difficult to reconcile with the conclusion that the Community 
industry competes with the Chinese and Vietnamese low end products. One interested 
party considered that the Commission had failed to provide a definition of what was to 
be  considered  as  high,  mid  and  low  end  products  and  claimed  that  no  evidence  had 
been provided showing that the Community industry was actually moving upmarket. 

(381)  One  interested  party  considered  that  the  Commission  had  failed  to  take  into  account 
the  impact  of  the  change  in  consumption  and  crisis  on  Community  industry.  In 
particular it was considered that the Commission had wrongly concluded that import 
prices would decrease as a consequence of the crisis when the actual developments in 
the  6  months  following  the  RIP  showed  a  decrease  in  volumes  and  an  increase  in 
price. 

(382)  One  interested  party  considered  that  the  Commission  had  not  provided  sufficient 
evidence  demonstrating  that  structural  deficiencies  would  not  be  the  reason  for  the 
problems  facing  industry.  According  to  this  party,  the  argument  that  injury  was  at 
hand also for the companies that had changed business model had to be rejected as it 
was considered that a change in business model as such would not necessarily indicate 
that there were no structural problems at hand  

(383)  In addition to the other causes mentioned above, one interested party claimed that the 
Commission had failed to assess in the overall analysis of other causes, the effects of 
remodelling of the business model on the profit of the Community producers and the 
effect  of  the  outsourcing  with  Community  industry  as  well  as  the  effect  of  lack  of 
skilled workers. 

(384)  In  this  context  it  is  recalled  that  a  most  careful  and  comprehensive  analysis  of  other 
factors has been made in the context of the review. It is also recalled, as concluded in 
recital  (285),  that  these  factors  were  analysed  taken  together  as  well  as  individually 
and  the  claim  that  the  Commission  was  using  an  isolationist  approach  can  therefore 
not be upheld. 

(385)  In  relation  to  the  impact  of  imports  from  third  countries  the  investigation  had 
established  that  there  are  considerable  differences  in  import  price  between  the 
countries  concerned  and  other  third  countries,  most  of  which  have  average  prices 
significantly higher than China’s and Vietnam’s. It is recalled from recital (277) that 
these  differences  apply  also,  to  India  and  in  when  compared  to  China  also  to 
Indonesia. Furthermore, even if one were to set aside the difference in import prices 

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the market share of India and Indonesia is only 8% and 5% respectively, as compared 
to  the  29%  market  share  of  China  and  Vietnam.  In  terms  of  volumes,  the  impact  of 
imports does therefore not break the causal link. 

(386)  Recitals (265) provide a comprehensive analysis as concern the competition between 
the  shoes  imported  from  the  countries  concerned  and  those  produced  in  the 
Community. In this context, it can only be added that findings regarding the sampled 
companies  that  had  changed  business  model  clearly  showed  that  this  part  of  the 
industry was moving to a higher product segment. A significant presence of dumped 
imports in the medium/high segments was also established. Evidence on product types 
produced  in  the  Community  and  those  of  the  imports  were  also  provided  in  the  non 
confidential  file.  As  was  already  established  in  the  previous  investigation,  the 
"mid/high” segment essentially reflect branded products of higher retail price. The low 
segments  reflect  un-branded  products  with  lower  prices.  Considering  the  above,  the 
claim  that  the  analysis  of  the  competition  between  the  products  lacked  factual  basis 
cannot be upheld. 

(387)  As  seen  from  recital  (278)  and  onwards,  a  comprehensive  analysis  was  made 
concerning the impact of the change in consumption trends. As concerns the impact of 
the economic crisis, good care was taken in the investigation to ensure that effect of 
the downturn was not attributed to the dumped imports. In this context, it should first 
and  foremost  be  underlined  that  the  RIP,  on  which  the  injury  analysis  was  based, 
covers  a  period  before  the  crisis.  The  effect  of  the  downturn  was  therefore  not 
reflected  in  the  analysis  of  the  RIP.  Considering  the  fact  that  a  number  of  interested 
parties  argued  that  the  economic  crisis  rather  than  the  dumped  imports  were  at  the 
heart of the problems facing the Community industry, an additional analysis, assessing 
in  particular  post  RIP  event  was  however  also  undertaken.  An  increase  in  import 
prices  in  the  6  month  period  following  the  RIP  would  not  negate  the  conclusion  as 
detailed  in  recital  (302)  that  the  downturn  could  magnify  the  effect  of  the  dumping. 
The  expected price pressure would apply on all levels not the least at retail level. In 
view  of  the  above,  the  claim  that  the  effect  of  the  drop  in  consumption  and  the 
economic downturn was not taken into account must be rejected. 

(388)  An  extensive  analysis  of  the  situation  of  the  Community  industry,  in  relation  to  the 
change of business model and efficiency was provided in the disclosure document. In 
this context, it should be added that the effect of the change of business model could 
clearly  be  seen  in  the  improving  trend  of  the  injury  indicators  of  this  group  of 
the  relationship  between  costs  and  prices 
companies.  The 
demonstrated that this new business model was crafted on efficiency and is viable. The 
claim that the change in business model would not provide evidence of efficiency of 
Community industry must therefore be rejected. 

improvement 

in 

(389)  Finally  it  is  recalled  that  contrary  to  what  is  claimed,  the  impact  of  the  change  in 
business model on profitability, sales and production was analysed in several sections 
of the disclosure and was taken into account when assessing the claim that Community 
industry suffered from structural problems. Similarly as explained above in recital 23, 
the  outsourcing  business  model  was  present  in  the  analysis.  An  assessment  was 
however also made under the Community interest section of the situation of importers 
and retailers and all data provided by the one cooperating producer excluded from the 
definition  of  community 
the 
unsubstantiated  claim  that  the  lack  of  skilled  workers  would  be  the  cause  of  the 

industry  was  carefully  analysed.  As  concerns 

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problems  experienced  by  the  Community  industry,  this  argument  was  already 
addressed in recital (244) and no further clarification would thus be needed. In view of 
the above, the claim that the Commission failed to take into account other factors must 
be rejected. 

K. COMMUNITY INTEREST 

1. 

Introduction 

(390)  According  to  Article  21  of  the  basic  Regulation,  it  was  examined  whether  the 
maintenance  of  the  existing  anti-dumping  measures  would  be  against  the  interest  of 
the Community as a whole. The determination of the Community interest was based 
on  an  appreciation  of  the  various  interests  involved,  i.e.  those  of  the  Community 
industry, other Community producers, importers, retailers/distributors and consumers.  

(391)  In  order  to  assess  the  impact  of  continuation  or  termination  of  the  measures,  the 
Commission  requested  information  from  all  relevant  interested  parties.  Although  not 
strictly necessary from a legal point of view, but given the complexity of the case, it 
was considered appropriate to collect, wherever possible, additional information from 
a  wider  range  of  angles  than  is  usual  in  the  EU's  practice.  This  allowed  the 
investigating  authority  to  cross  check  the  validity  of  the  findings.  As  concerns  the 
Community  industry,  not  only  the  companies  sampled  in  this  expiry  review 
investigation  were  requested  to  provide  specific  data  but  also  other  Community 
producers.  Altogether,  the  comments  of  14  Community  producers  as  well  as  the 
information  provided  by  nine  footwear  industry  associations  could  be  taken  aboard. 
Sampling questionnaires were sent to 139 companies which were either known to be 
or  listed  in  the  request  as  importers  of  the  product  under  review.  Several  others 
received  such  a  questionnaire  at  their  request.  21  importers  filled  in  this  sampling 
questionnaire  and  indicated  a  willingness  to  be  included  in  the  sample.  Specific 
questionnaires  for  the  purpose  of  this  analysis  were  also  sent  to  associations  of 
importers as well as to wholesalers, distributors and retailers and their associations. In 
this  context,  eight  replies  were  received.  Finally,  consumers  associations  were  also 
contacted with specific questions. Three of them replied. 

(392)  The fact that the present investigation is a review, thus analysing a situation in which 
anti-dumping  measures  have  already  been  in  place,  allows  the  assessment  of  any 
undue negative impact on the parties concerned by the current anti-dumping measures. 
On  the  basis  of  the  above,  it  was  examined  whether,  despite  the  conclusions  on 
continuation of dumping and injury, compelling reasons existed which would lead to 
the conclusion that it was not in the Community interest to maintain the measures in 
this particular case. 

2. 

Interest of the Community industry 

(393)  As concerns the Community industry, as set out in G.2, G.3 and G.4, the investigation 
showed that a significant part of the Community  producers was able to benefit from 
the  imposition  of  measures.  The  economic  free  fall  that  was  found  in  the  original 
investigation and led to the imposition of definitive anti-dumping measures has been 
halted  as  the  continuous  loss  of  market  share,  profitability  and  employment  came  to 
end. This stabilisation of the situation of the Community industry is indeed considered 
an important improvement given that it shows that in a relative short period of time a 

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large part of Community producers could reverse the steep downward trend observed 
before  the  imposition  of  measures.  Indeed,  the  review  revealed  that  there  is  still 
important production/manufacturing of footwear with uppers of leather within the EU, 
amounting to around 360 million pairs of shoes in the RIP and providing employment 
to around 260 000 people. It is recalled that the vast majority of these producers are 
small to medium sized companies which are vital for the prosperity in certain regions. 
A significant proportion of those producers developed business models that increased 
their  competitiveness  such  as  moving  gradually  upmarket,  concentrating  on  higher 
value  products,  creating  brands,  streamlining  their  distribution  channels,  creating 
cooperation  networks  in  their  vicinity  or  elsewhere,  as  described  in  recitals  (258)  et 
seqq.  With  regard  to  the  still  significant,  but  decreasing,  part  of  the  Community 
industry  whose  situation  has  continued  to  deteriorate  in  all  aspects,  despite  the 
imposition  of  measures,  they  benefited  from  the  measures  insofar  as  the  measures 
have prevented an even more rapid deterioration and potential bankruptcy, providing 
for valuable time to enable them to adapt to the changing market conditions. 

(394)  On  the  other  hand,  the  investigation  showed  that  after  two  years  of  measures,  the 
Community industry is still in an overall fragile situation and vulnerable to the effect 
of  dumped  imports  that  are  undercutting  the  prices  of  the  Community  industry  as 
elaborated in recital (259) et seqq. 

(395)  In summary, the industry benefited from the measures and has shown its capacity to 
improve  its  situation  and  its  viability  once  measures  mitigate  the  effects  of  injurious 
dumping.  

(396)  In this respect, several interested parties claimed and reiterated after disclosure of the 
definitive findings that the measures did not have the desired effect of bringing some 
market  share  or  production  back  to  the  EU  producers,  but  predominantly  benefited 
other third country producers. It is noted that, as shown in table 10, the market share of 
the  Community  industry  remained  stable  whereas  the  market  share  of  imports  from 
other countries increased significantly. Thus, already from the mere data, it is shown 
that  the  Community  industry  has  stabilised  its  position  on  the  market  since  the 
imposition  of  the  anti-dumping  measures.  Against  a  background  of  ever  decreasing 
sales and market shares stated in the original investigation, a stabilisation at a level of 
ca.  40%  of  market  share  has  to  be  considered  as  an  important  success  for  the 
Community  industry.  Moreover,  it  is  underlined  that  anti-dumping  measures  are  not 
imposed to create employment in the EU or to ultimately bring back production to the 
EU (or to stop imports), but to restore a level playing field between the EU products 
and the dumped imports. Anti-dumping measures are only imposed with a purpose to 
restore  fair  trade  conditions  on  the  Community  market  and  thereby  to  allow 
Community producers to recover by either increasing their sales and/or by increasing 
their  prices  to  sustainable  levels.  Moreover,  as  set  out  in  table 8,  these  third  country 
imports  had  a  significant  higher  average  import  price  so  that  their  effect  on  the 
Community  producers  is  less  pronounced.  To  conclude,  the  EU  producers  benefited 
from the imposition of the measures because the continuous loss of market share was 
stopped, they stabilised their sales volume and managed to increase their profitability 
and sales prices. In view of this, the argument is rejected.  

(397)  Should measures be maintained, it can be expected that the Community industry will 
continue to benefit from the measures by at least keeping its relative market position 
and  to  further  improve  it  once  the  negative  effects  of  the  economic  downturn  are 

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overcome. During the economic downturn, the measures would likely help to cushion 
the  effect  of  the  significant  amount  of  dumped,  low-priced  imports  by  preventing 
another surge of imports as was observed before the imposition of measures, notably 
in  2005  after  the  quotas  lapsed.  Considering  that  competition  has  increased  across 
product  segments  i.e.  due  to  fashion  trends  resulting  in  the  interchangeable  use  of 
product  types,  measures  would  also  help  to  protect  Community  produced  products 
from  dumped  imports  breaking  into  their  product  segment.  Indeed,  as  was  found 
during the investigation, also the certain producers in the countries concerned moved 
upmarket, by producing increasingly mid to even high end shoes. This would enable 
the Community industry to maintain their relative positioning and thereby safeguard a 
significant employment rate.  

(398)  It can also be expected that with the economic conditions improving and consumption 
increasing,  people  would  be  ready  to  spend  more  on  footwear  and  in  particular  on 
higher  value  footwear,  thus  benefiting  more  the  EU  producers.  In  this  scenario,  the 
continuation  of  the  measures  would  allow  an  increasing  part  of  the  Community 
producers  to  (continue  to)  further  develop  their  business  models,  production  process 
and  distribution  channels  and  thereby  improve  their  financial  situation  gradually,  as 
was evidenced during the review investigation period.  

(399)  Should  measures  lapse,  it  can  be  expected  that  the  already  fierce  competition,  in 
particular  at  the  middle/low  end  segment,  will  be  reinforced  considerably.  It  can 
further be expected that this increased competition on the prices in the low and middle 
segment will have a direct effect on the prices of all other styles. This in turn will very 
likely endanger also the large group of Community producers that managed to redefine 
their  business  model  and  to  improve  their  situation.  As  the  financial  situation  and 
profitability  of  those  producers  is  not  robust  enough  to  withstand  the  price  pressure 
exerted by large amounts of dumped imports that considerably undercut the prices of 
the Community industry for an extended period of time, this would lead very likely to 
many more producers disappearing and to a significant loss of direct employment of 
EU producers and suppliers of goods and services to the EU industry.  

3. 

Additional analysis regarding the interest of Community manufacturers 

(400)  In  order  to  get  a  more  complete  picture of  the  interest  of  Community  manufacturers 
and beyond the standard analysis of the impact on the Community industry as a whole, 
additional  information  was  collected  via  the  national  footwear  industry  associations 
and  the  companies  that  were  sampled  in  the  original  investigation.  Furthermore,  one 
co-operating producer which has been excluded from the Community industry but still 
has significant production in EU submitted its views.  

(401)  The additional information collected from the national footwear associations showed a 
mixed picture, mostly depending on whether there is considerable footwear production 
in  the  specific  Member  State  left  or  whether  the  country  had  important  importing 
interests.  Whereas  five  national  associations  with  important  footwear  production 
supported  the  continuation  of  the  measures  and  highlighted  the  benefits  of  the 
measures  for  their  national  footwear  producers,  four  other  associations  representing 
countries where the production of footwear has largely or entirely been outsourced to 
third  countries  or  with  important  production  capacity  but  also  significant  imports, 
stated that the continuation of the measures would overall be against the interest of the 
Community. The latter associations represented more companies that were importing 

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or  distributing/retailing  to  a  significant  extent.  Therefore,  their  views  were  also 
considered  under  the  recitals  dealing  with  the  interests  of  unrelated  importers  and 
retailers  below.  On  balance,  the  total  volume  of  production  accounted  for  these  four 
associations  was  significantly  lower  than  that  of  the  five  associations  which  argued 
that measures benefited manufacturers.  

(402)  Moreover, the EU producers that had been sampled in the original investigation were 
also  contacted  in  order  to  complement  the  picture  and  to  analyse  some  of  the 
allegations made that the EU industry had disappeared and thus not benefited from the 
imposition  of  the  measures.  This  additional  collection  of  information  from  the 
previously sampled EU producers was also justified under Community interest aspects 
because the footwear sector in the EU belongs to an industry that is so fragmented and 
heterogeneous that the injury sample is unavoidably small.  

(403)  This  look  at  the  situation  of  the  previously  sampled  EU  producers  indicated  that  all 
cooperating  companies  sampled  in  the  original  investigation  have  kept  a  significant 
part of their production in the EU. Overall they were favourable to the continuation of 
the anti-dumping measures and highlighted the positive effect of it for the employment 
in  the  Community.  At  the  same  time,  most  of  them  have  partly  delocalized  parts  of 
their  production  of  shoes  to  countries  outside  the  Community  including  one  of  the 
countries  concerned  and  have  pursued  complementary  solutions  in  their  business 
strategy  in  order  to  enhance  competitiveness.  Those  which  continue  to  produce  only 
in-house  in  the  Community  specialize  in  higher  end,  higher  quality  products  with 
relatively  short  lead  times.  The  replies  of  those  previously  sampled  EU  producers 
confirmed  that,  as  has  been  described  in  the  injury  part  for  the  sampled  Community 
producers,  different  business  models  have  been  developed  and  some  of  the 
Community  producers  adapt  to  the  changing  market  circumstances  by  a  number  of 
actions,  including  outsourcing  part  of  the  production  to  third  countries  and/or  within 
the EU, changing sales channels, invest in quality and brand image etc. These replies 
also confirm the general picture described above regarding the benefits of maintaining 
measures and the disadvantages of repealing them for the Community industry.  

(404)  Lastly,  in  order  to  further  complete  the  picture  of  manufacturing  interests  in  the 
Community, the reply by the producer excluded from the definition of the Community 
industry, was also analysed. It submitted a consolidated reply of European activities as 
well as specific replies by its two European manufacturing operations. This producer 
had opposed the review request as it was against the continuation of the anti-dumping 
measures in question.  

(405)  The  company  has  two  production  facilities  in  the  Community  which  are  assembly 
operations,  using  uppers  which  have  been  manufactured  in  Asia.  Nevertheless,  the 
production  volumes  of  these  two  plants  have  significantly  decreased  between  2005 
and  the  RIP.  Whereas  in  2005  imported  footwear  represented  less  than  half  of  the 
volumes  of  shoes  sold  by  this  company,  this  percentage  increased  significantly  until 
the  RIP  in  which  the  majority  of  the  footwear  sold  by  the  company  was  a  direct 
purchase  from  Asia.  More  recent  market  intelligence  indicates  that  the  company  is 
further decreasing its production activities in the EU and replacing these quantities by 
imports. 

(406)  Although the company had significantly decreased its manufacturing activities in the 
Community, this had only resulted in a slight decrease in overall employment within 

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the  Community.  It  appeared  that,  since  2005,  the  company  had  increased  its  global 
turnover  and  significantly  improved  its  profitability.  This  had  led  to  additional 
employment  in  the  Community  in  fields  other  than  manufacturing  (administration, 
design&  development,  marketing  &  sales,  etc.).  From  the  information  available,  it 
appears  that  whereas  anti-dumping  duties  had  a  negative  impact  on  the  financial 
results  of  the  company,  they  were  not  so  significant  as  the  overall  profitability 
improved. The existence of anti-dumping measures did not prevent the company from 
continuing  outsourcing  production  to  third  countries,  including  to  the  countries 
concerned. On the other hand, the imposition of measures did not lead the company to 
increase  its  production  activities  in  the  EU  either.  Thus,  the  strategic  decisions  on 
production activities appear to have been taken on broader cost considerations.  

(407)  Should  measures  be  maintained,  the  company  would  very  likely  continue  to  be 
affected by the anti-dumping duties, given that it will likely continue to import from 
the  countries  concerned.  The  extent  of  this  negative  impact  of  the  duties  will  very 
likely continue to be not significant, given that the company can diversify its import 
sources, as they did in the past. Should measures be repealed, on the other hand, the 
company would benefit in view of its imports from the countries concerned and could 
likely increase its profitability further.  

(408)  In conclusion, a refined analysis of other Community producers confirms the general 
findings, i.e. producers developed several different business models and most of them 
appeared  to  have  benefited  from  the  imposition  of  anti-dumping  measures,  as  they 
reported to have slightly improved their situation and increased their competitiveness 
by adapting, inter alia, production strategies and sales channels. Thus, the information 
available  suggests  that  most  of  these  producers  would  continue  to  benefit  from  the 
maintenance  of  the  measures  at  least  as  far  as  their  decision  to  keep  production 
activities  in  the  EU  is  concerned.  In  turn,  these  producers  would  also  suffer  should 
measures lapse because the dumped imports from the countries concerned would exert 
a downward pressure on the prices on all product segments produced by them.  

(409)  The  negative  effects  on  some  producers  which  have  outsourced  production  to  the 
countries concerned would very likely continue not be disproportionate, as was shown 
in  the  past  and  given  that  the  measures  did  not  prevent  those  producers  from 
continuing  to  outsource  to  the  countries  concerned.  Thus,  the  impact  of  the  anti-
dumping  duties  on  those  producers  will  depend  mostly  on  the  companies'  own 
sourcing decision. It would thus be in the companies' own hand to steer the impact of 
the anti-dumping duties.  

4. 

Interest of the unrelated importers 

4.1.  General  

(410)  The  review  investigation  confirmed  that  two  main  categories  of  importers  can  be 
distinguished. One category mainly consists of companies that import and resell their 
own branded shoes, the production of which they have outsourced in third countries. 
These companies usually have significant activities in the Community, e.g. in design, 
research  &  development,  sourcing  of  raw  materials,  and  sometimes  even  their  own 
distribution chain. It follows from this, that these category of importers have important 
"adding  value"  activities  in  the  Community  where  they  usually  employ  a  relatively 
high  number  of  people.  The  second  category  consists  of  importers  which  are  pure 

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traders  focussing  their  trading  more  on  volumes  and  less  on  brand  –  they 
predominantly  trade  "private  label"  shoes.  These  importers  in  general  have  lower 
structure costs and less added value activities in the Community.  

(411)  It  was  found  that  within  these  two  main  categories,  there  are  different  business 
models. For example, in the first category one can distinguish brands with a European 
origin, but also non European brands, and formal footwear as well as casual footwear. 
In the second category one can find importers which have their own retail stores, but 
also importers which only sell to wholesalers/distributors. Some of the companies in 
this  second  category  will  only  trade  private  label  shoes,  but  others  will  also  have 
specific  sourcing  agreements  with  established  brands,  and/or  licensing  agreements, 
and/or joint ventures.  

(412)  In view of the diversity amongst importers, as described above, and in order to capture 
a  picture  as  complete  as  possible,  the  situation  of  importers  has  been  analysed  from 
several  different  angles.  Firstly,  the  comments  received  by  importers  and  their 
associations  have  been  analysed.  In  addition,  statistical  data  as  well  as  relevant 
publications  have  also  been  consulted  and  used  in  this  respect.  Finally,  for  some 
economic key data, the verified information of the importers' sample was used.  

(413)  As  mentioned  above,  for  establishing  some  economic  key  data  it  was  decided  to 
sample  importers.  This  decision  was  taken  based  on  the  fact  that  the  original 
investigation showed that the number of cooperating importers was high and many of 
them had sent in a questionnaire reply. It was therefore considered appropriate, in this 
expiry review, to apply sampling.  

(414)  As  already  mentioned  in  recital  (37),  from  the  21  Community  importers  that  came 
forward  and  showed  a  willingness  to  cooperate  with  the  investigation,  eight  were 
sampled. The sample consisted of the five largest companies in terms of volumes and 
value of imports and re-sales in the Community plus a few smaller importers; the latter 
in order to have a more representative cross-section of the parties offering cooperation 
with  their  different  business  models,  geographical  location  and  traded  product 
segments.  The  sampled  companies  constituted  the  maximum  number  of  companies 
that  could  reasonably  be  investigated  within  the  time  available.  According  to  the 
figures available at that stage of the investigation, the sampled importers accounted for 
around 18% of Community imports of the product under review during the RIP. One 
of the sampled companies, although it had indicated a willingness to be included in the 
sample,  did  finally  not  reply  to  the  questionnaire  and  all  efforts  to  secure  the 
cooperation of this small importer were fruitless. Therefore, this company eventually 
had  to  be  excluded  from  the  sample.  The  seven  other  sampled  importers  fully 
cooperated  with  the  investigation  and  sent  questionnaire  responses  within  the 
deadlines.  

(415)  As mentioned above, the verified data of the sampled importers, on an aggregate basis, 
has,  inter  alia,  allowed  for  a  detailed  analysis  of  certain  key  economic  parameters 
which,  in  view  of  the  large  number  of  operators,  could  reasonably  only  be  achieved 
via  sampling.  However,  the  analysis  of  the  situation  of  the  importers  has  not  been 
limited  to  the  information  provided  within  the  framework  of  the  sampling  exercise. 
Specialized press and market studies as well as information sought and received from 
interested  parties  has  also  been  taken  into  consideration  in  the  Community  interest 

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analysis.  The  use  of  that  information  further  ensured  that  all  main  business  models 
active in this sector were sufficiently represented in the analysis.  

(416)  Based on the verified information of the sampled importers and other information on 
file,  it  is  estimated  that  the  importation  and  resale  to  distributors/retailers  of  the 
product under review provided employment to around 23 000 people in the EU during 
the RIP.  

4.2. 

Import volumes 

(417)  As  already  reflected  in  table  4,  Eurostat  data  show  that,  since  2005,  imports  of  the 
product under review decreased significantly by ca. 90 million pairs. During the same 
period, imports of leather shoes from other countries increased by ca. 43 million pairs 
to 201 million pairs. The result is that, whereas in 2005 the volume of imports from 
the PRC and Vietnam was much higher (+80%) than the volume of imports from all 
other countries, during the RIP the level of imports from other countries had exceeded 
the level of imports from the PRC and Vietnam by 4%. Eurostat data also show that 
since 2005 overall imports of the product in question decreased by 11%. 

(418)  A large importer which cooperated with the investigation but did not participate in the 
sampling  exercise  reported  a  similar  evolution  of  imports.  This  company  submitted 
that its purchases  of  the product under review declined by 25% since 2005, whereas 
imports of leather shoes from other countries increased significantly. 

(419)  As regards the sampled importers, the leather shoes imports during the period 2005 - 

RIP have developed as follows in terms of volumes: 

Table 19 

Import volumes of sampled importers (pairs) 

2005 

2006 

2007 

RIP 

PRC & Vietnam 
indexed 
Other countries 
indexed 

29 761 231 
100 
13 181 962 
100 

30 806 163 
104 
16 077 607 
122 

26 616 891 
89 
22 680 174 
172 

29 577 492 
99 
28 096 596 
213 

(420)  In  line  with  the  general  statistical  data  the  sampled  importers  significantly  increased 
their purchases of leather shoes from other countries. Imports volumes from the PRC 
and  Vietnam  have  remained  fairly  stable  since  2005,  with  a  certain  dip  in  2007,  but 
recovery in the RIP to almost the same level as in 2005. It follows that, as regards the 
sampled  importers,  overall  the  volume  of  traded  leather  footwear  has  increased  by 
nearly  1/3  since  2005,  with  a  stable 
the  countries  concerned, 
notwithstanding  the  imposed  anti-dumping  measures,  and  an  increasing  trend  from 
third  countries.  Out  of  the  third  countries  that  have  benefited  from  these  increased 
import volumes, Indonesia and India have benefited the most. 

trend  from 

(421)  The  sample's  purchase  trend  from  the  countries  concerned  is  stable  which  does  not 
correspond to the trend observed in Eurostat (significant decrease). A closer look into 
the sample suggests that the stable trend for the imports from the countries concerned 
stems  from  the  fact  that  one  of  the  larger  sampled  importers  –  against  the  trend  not 

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only of Eurostat but also of the other sampled importers – not only strongly increased 
its  purchases  from  third  countries  but,  in  order  to  meet  demand,  also  increased  its 
imports  from  the  countries  concerned  significantly,  thereby  offsetting  the  overall 
decreasing  trend  of  such  imports  in  the  sample.  Taking  this  into  account,  it  is 
concluded that the evolution of imports of the product in question in the sample is in 
line with the quantitative analysis of the Eurostat database, i.e. a general decrease of 
imports from the countries concerned. 

4.3.  Purchase prices 

(422)  As  shown  in  tables  5  and  8,  Eurostat  data  suggests  that  average  import  prices  of 
leather  shoes  from  the  countries  concerned  and  third  countries  have  both  increased 
since 2005, and CIF import prices of leather shoes from third countries even slightly 
more than CIF import prices of leather shoes from the countries concerned. However, 
given that the mix of the imported shoes has a significant impact on the prices and that 
this mix for all exporting countries may have changed considerably, the average prices 
which can be calculated from reported Eurostat volumes and values are not necessarily 
the  most  accurate  for  establishing  price  trends.  In  this  respect,  the  price  trend  of  the 
importers'  sample  can  be  considered  more  meaningful  as  the  importers'  product  mix 
has likely changed to a lesser extent given that those companies are all specialised in 
certain types and styles of footwear for a long period of time.  

(423)  As  described  in  recitals  (414)  and  (410)  et  seqq.,  the  sampled  importers  represented 
various different business models which resulted, inter alia, in significant differences 
in average prices per importer. Moreover, some of the importers traded many millions 
of pairs per year, whereas others traded "only" a few hundred thousand pairs per year. 
Thirdly, for some of the individual importers the traded volumes –and, consequently, 
their weight in sample- fluctuated strongly throughout the period considered. For those 
reasons, it was considered that weighted average results should be complemented with 
an  arithmetic  average  analysis  in  order  to  acquire  a  complete  picture  of  the  relevant 
trends. 

(424)  The average import prices of the sampled importers during the period 2005-RIP have 

been as follows:  

Table 20 

Average import prices of sampled importers (€) 

2005 

2006 

2007 

RIP 

PRC and Vietnam 
CIF: weighted average 
indexed 
CIF: arithmetic average 
indexed 
Landed*: weighted average 
indexed 
Landed*: arithmetic average 
indexed 

EN 

11.81 
106 
11.42 
112 
13.43 
115 
12.98 
121 

10.24 
92 
10.54 
104 
12.12 
103 
12.48 
116 

10.07 
91 
10.42 
102 
11.88 
101 
12.30 
115 

11.10 
100 
10.17 
100 
11.72 
100 
10.74 
100 

79 

   EN 

 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
Other countries 
CIF: weighted average 
indexed 
CIF: arithmetic average 
indexed 

13.11 
100 
12.21 
100 

12.71 
97 
12.56 
103 

10.85 
83 
12.59 
103 

10.46 
80 
11.53 
94 

* Simulated landed price = CIF + import duty + anti-dumping duty (as from 7 April 2006) + customs handling 
charges 

(425)  An analysis of CIF import prices from the PRC and Vietnam from 2005, i.e. the last 
year  without  anti-dumping  measures,  until  the  RIP  shows  an  increase  by  2% 
(arithmetic  average)  or  a  decrease  by  9%  (weighted  average).  Overall,  the  analysed 
data  would  point  to  stable  or  somewhat  decreasing  import  prices  before  import  and 
anti-dumping duties. In both scenarios, import prices before duties increased strongly 
in 2006 and decreased afterwards.  

(426)  At the same time, average CIF import prices of leather shoes from other countries fell 
in both assessments (-20% to -6%). Consequently, the gap between the import price of 
leather  shoes  before  duties  from  the  countries  concerned  and  other  countries  has 
decreased, roughly from € 2,00 per pair to € 1,0 0 (in percentages: from ca. 20% to ca. 
10 % - arithmetic averages) or from € 2,00  to € 0,50 (in percentages: from ca. 20% to 
ca. 5% - weighted averages). Anti-dumping duties are added only in case of the PRC 
and  Vietnam.  The  average  landed  prices  (i.e.  import  prices  inclusive  of  importation 
costs, import duties and, if applicable, anti-dumping duties) of leather shoes from the 
PRC  and  Vietnam  on  the  one  side  and  from  other  countries  on  the  other  side  can 
therefore now be considered as being at more comparable levels. Ergo, the prices of 
leather shoes produced in other countries become more attractive as compared to the 
prices of shoes produced in the countries concerned.  

4.4.  Resale prices 

(427)  As concerns the importer's resale prices detailed information was acquired through the 
importers'  sample.  The  sampled  importers'  resale  prices  of  the  product  under  review 
have developed as follows: 

Table 21 

Average resale prices of sampled importers (€) 

Weighted average 
indexed 
Arithmetic average 
indexed 

2005 

2006 

2007 

RIP 

34.62 
100 
27.09 
100 

36.97 
107 
29.72 
110 

33.68 
97 
28.46 
105 

32.28 
93 
29.24 
108 

(428)  The  above  data  points  to  stable  or  slightly  increasing  resale  prices  over  the  period 
2005 - RIP. In 2006, resale prices increased by 7% to 10% which is an increase similar 
to the increase of CIF purchase prices in 2006 (see recital (424) above). From 2006 to 
the RIP, resale prices decreased. 

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(429)  The investigation did not bring any information or evidence to light, indicating that the 
resale  prices  of  other  importers  would  have  developed  in  a  different  direction  than 
described above.  

4.5.  Profitability 

(430)  As  regards  the  sampled  importers,  the  profitability  was  established  based  on  the 
combination of the import and resale price picture just described and the development 
of  the  importers'  other  cost  factors.  Following  disclosure,  some  of  the  sampled 
importers questioned their individual profit data used and requested that revised data 
be  accepted.  Some  of  these  claims  were  accepted  and  some  clerical  errors  were 
corrected. The revised profitability picture is as follows: 

Table 22 

Average profit on product under review achieved by sampled importers 

(net profit before taxes/turnover) 

2005 

2006 

2007 

RIP 

Weighted average 

36,4% 

18,3% 

20,7% 

20,5% 

Arithmetic average 

29,6% 

17,9% 

20,8% 

21,4% 

Note: profit on importers sales to consumers (retail sales) excluded 

(431)  The above figures have been calculated on the basis of the profit figures on the product 
under  review,  as  reported  by  the  sampled  importers.  In  some  cases,  the  reported 
figures had to be revised following the on spot verification. As stated above, following 
the  definitive  disclosure,  four  sampled  importers  questioned  their  individual 
profitability  analysis  and  reiterated  that  revised  data  as  submitted  after  the  on  spot 
verification should be accepted. With regard to one sampled importer it is noted that 
its claim regarding the selling, general and administrative cost (SG&A) was partially 
accepted  by  correcting  a  clerical  error,  leading  to  a  small  decrease  of  the  sample's 
profitability  as  disclosed  to  interested  parties.  However,  its  claim  that  the  originally 
reported  SG&A  should  be  accepted  and  that,  in  addition,  a  significant  amount  of 
royalties that allegedly had to be paid to its related company outside of the EU should 
be  taken  into  consideration  has  to  be  rejected.  As  regards  the  originally  reported 
SG&A, during the verification visit they were found to be overstated as the company 
could  not  substantiate  the  claimed  amounts.  Thus,  a  correction  was  made  based  on 
documents received during the verification visit. As to the alleged costs for royalties, 
this  amount  was  claimed  only  after  the  verification  visit  and  the  claim  was  not 
sufficiently substantiated. As regards the second sampled importer, it also reiterated its 
request that revised profitability data based on the profit reported in a form allegedly 

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submitted to the US authorities should be accepted. In this respect, it is noted that the 
company  had  submitted  a  profitability  table  for  the  product  concerned  which  was 
confirmed  during  the  verification  as  it  could  be  fully  reconciled  with  the  audited 
accounts  and  other  available  data.  The  document  sent  in  after  the  verification  only 
mentioned  a  global  profit  level  for  "Europe"  and  included  all  products  and  probably 
also  those  operations  outside  the  27  EU  Member  States,  but  geographically  within 
Europe (Switzerland, Balkans). This form could also not be linked to the verified data 
on spot and thus the claim was rejected. In its submission after disclosure the company 
provided  more  details  in  this  respect,  but  due  to  its  late  submission  and  lack  of 
substantiated  evidence  it  could  either  be  considered.  The  second  claim  of  that 
company related to some cost items that should have been taken into account, two of 
which  could  not  be  linked  to  the  information  verified  on  the  spot.  However,  it  was 
accepted to take into consideration a third cost item that was fully verified during the 
verification  and  it  was  simply  omitted  by  accident  in  the  table.  The  impact  on  the 
overall profitability was however limited. The third importer originally only submitted 
profit data for a small part of its EU operations. The data submitted cannot be regarded 
as  representative  for  the  company  EU  operations  in  general  given  that  significant 
differences between the regions existed as concerns costs and income. Thus, the profit 
data was complemented during the on-spot verification by the remaining EU operation 
figures based on all verifiably information available. The company contested the result 
of  that  computation  and  submitted  at  the  end  of  the  verification  visit  a  revised 
profitability  table  which  only  differed  in  one  item  from  the  Commission's 
computation, i.e. the purchase cost. As this proposed purchase cost could however not 
be linked to the information available, contrary to the purchase costs as established by 
the Commission, the revised table was not accepted. The claim was thus rejected and 
the  profitability  data  as  established  during  the  on  spot  verification  was  used.  The 
fourth  importer  contested  following  disclosure  its  own  profitability  data  submitted, 
verified and accepted without further adjustments during the on spot verification visit, 
arguing  that  the  whole  methodology  used  would  not  be  accurate.  As  the  company 
however did not suggest a different methodology to be applied to establish the profit 
on the product under review, the claim has to be rejected as unsubstantiated.  

(432)  It  is  recalled  that  in  the  original  investigation,  the  questionnaire  replies  from  the 
cooperating importers indicated a weighted average net profit of 12% for the period of 
1 April 2004 until 31 March 2005. In this review investigation, the verified data of the 
sampled importers however showed that the weighted average profit of those sampled 
importers in 2005 was above 20%. In 2006, a significant drop in profitability occurred, 
by  more  than  18  percentage  points  on  a  weighted  average  basis  and  by  close  to  12 
percentage points on an arithmetic average. It appeared that most of the sales contracts 
had already been agreed before the imposition of the provisional measures  in March 
2006  and  in  many  cases  the  agreed  sales  prices  did  not  take  account  of  the  possible 
imposition of anti-dumping duties. Consequently, the profit of the sampled importers 
achieved  on  the  product  under  review  declined  in  2006.  In  2007  and  RIP  the  profit 
increased again, but it is still 8-16 percentage points below the profit achieved in 2005.  

(433)  Given  that  after  March  2006,  most  of  the  sampled  importers  adapted  their  sourcing 
channels and pricing policy to the changed circumstances, i.e. the imposition of anti-
dumping duties, a closer analysis of the factors impacting the profitability as of 2007 
was  carried  out.  The  following  can  be  noted.  First,  whereas  the  profit  drop  in  2006 
could  largely  be  attributed  to  the  anti-dumping  duties,  in  2007  and  the  RIP  other, 

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company-specific factors were also having an important negative impact on the profit 
of  the  importers'  sample.  In  2007  and  the  RIP  certain  sampled  importers  incurred 
significant  increases  in  SG&A  expenses,  resulting  in  strongly  deteriorating  gross 
margins.  This  had  a  bearing  on  the  calculated  profit  for  the  sample  as  a  whole.  No 
common  reason,  such  as  e.g.  higher  marketing  costs  for  sporting  events,  could  be 
found for this increase in SG&A cost for those sampled importers.  

(434)  At the same time, it is noted that the Euro - US dollar exchange rate development has 
helped  the  importers  in  keeping  their  purchase  cost  down,  including  the  cost  of  the 
product  under  review.  From  the  end  of  2005  until  the  end  of  the  RIP,  the  Euro 
appreciated  by  almost  30%  as  compared  to  the  US  dollar  and,  as  the  importers' 
contracts  with  their  suppliers  are  usually  set  in  US  dollars  and  only  limited  hedging 
has  been  reported  by  the  importers,  this  "gain"  cushioned  the  effect  of  the  anti-
dumping duties and other cost increases. On the basis of information provided by one 
of  the  sampled  importers,  profit  levels  during  the  RIP  could  have  been  up  to  6 
percentage points lower had the exchange rates remained stable.  

(435)  Moreover,  an  alternative  profitability  analysis  was  made,  distinguishing  the  profit 
achieved on private label footwear from profit made on branded footwear. To this end, 
the  verified  data  available  from  the  sampled  importers  was  complemented  by  the 
information  obtained  by  another  large  importer of private label shoes, which did not 
come  forward  in  the  sampling  exercise,  but  cooperated  with  the  investigation  by 
submitting  its  views.  This  information  suggests  that  the  profit  levels  of  the  private 
label shoe importers were in general significantly lower than the profit levels of most 
of the branded shoe importers, but they were still high and within the range of 11% to 
17% during the RIP. This confirms the findings of the original investigation in which 
this category of importers reported to realise a profit level of 17% on average. On the 
other hand, this refined analysis also showed that for importers of branded footwear, 
the  profitability  has  improved  since  the  original  investigation.  In  that  investigation, 
those  importers  had  reported  on  average  a  profitability  of  around  10%  whereas  the 
profit of the sampled importers of branded footwear during the RIP amounted to more 
than  20%.  It  can  thus  be  concluded  that,  in  general,  the  economic  situation  of  the 
group  of  private  label  footwear  importers  has  remained  largely  the  same  since  the 
original  investigation,  whereas  the  situation  of  the  branded  footwear  importers 
appeared to have even improved. 

(436)  Also, as some of the sampled companies performed additionally retailing activities, a 
refined  analysis  was  performed,  splitting  between  profits  achieved  on  pure  trading 
activities, (i.e. purchasing of the product from producers and/or traders and re-selling it 
to  wholesalers  and  distributors)  on  one  hand  and  import  and  retail  activities  on  the 
other.  If  this  retail  business  would  be  excluded  from  the  profit  calculation  and  the 
profit  margin  would  be  calculated  on  the  pure  importers  function,  the  average  profit 
would be up to 6 percentage points higher. 

(437)  In  any  case,  under  any  scenario  the  profit  levels  achieved  by  the  sampled  importers 
were  relatively  high,  and  they  did  not  show  a  decreasing  trend  after  2006.  It  is  also 
noted  that  the  overall  level  of  the  sampled  importer  profits,  i.e.  always  above  10%, 
point to a rather stable and sustainable business. 

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(438)  The investigation did not bring any information or evidence to light, indicating that the 
profit level of other importers would have developed in a different direction than the 
profit trends as described above.  

4.6. 

The impact of the economic downturn post-RIP 

(439)  In view of the global financial and economic crisis which started just after the RIP, it 
was considered appropriate to analyse the situation of the importers beyond the RIP. 
Already  in  several  of  the  submissions  received  reference  was  made  to  the  direct 
negative  impact  that  this  economic  downturn  would  have  on  the  sector,  aggravating 
the negative impact of the anti-dumping duties. On the basis of additional information 
and comments provided by parties, as well as publicly available information such as 
Eurostat, market intelligence etc., the following picture emerges. 

(440)  From the available statistical data it appears that imports from the countries concerned 
continue to drop, although the decline is moderate as compared to the decrease in the 
period  from  2005  to  the  RIP  (-15%  post-RIP).  At  the  same  time,  imports  from  third 
countries continue to increase. In other words, the process of shifting production from 
the countries concerned to third countries is still on-going. Eurostat data also point at 
strong  increases  in  import  prices,  notably  as  concerns  footwear  from  the  countries 
concerned (+21.5% as compared to RIP).  

(441)  A similar post-RIP evolution is reported by the sampled importers, which continued to 
increase their sourcing from other countries and decrease sourcing from the countries 
concerned. Overall, their imported volumes of the product in question remained rather 
stable.  The  importers  explained  that  due  to  the  approximately  6-month  lead  time, 
purchases after the RIP were a result of orders placed before the start of the economic 
downturn.  The  sampled  importers'  average  purchase  prices  in  Euros  of  the  product 
under review increased as compared to the RIP, by 15% approximately. The reasons 
for  this  price  increase  as  reported  by  the  importers  are  first  the  appreciation  of  the 
USD at the end of 2008 and the beginning of 2009 which increased the sourcing costs 
in EUR terms of products from the countries concerned and second, the increased cost 
of production in the countries concerned, specially the increase in labour costs.  

(442)  As  the  resale  prices  remained  stable  or  increased  slightly  only,  it  appears  that  the 
profitability  of  the  sampled  importers  on  their  trading  of  the  product  under  review 
might  have  been  further  affected.  Moreover,  importers  have  claimed  that  due  to  the 
advance purchase orders and the subsequent contraction in demand, their inventories 
have  increased  considerably.  However,  a  calculation  of  importers'  post  RIP  profit 
levels based on the provided price data showed that the fall in profit would most likely 
be  moderate  (by  2  percentage  points  approximately),  resulting  in  still  healthy  profit 
levels overall. 

(443)  It  was  however  mentioned  by  several  importers  that,  since  autumn  2008,  consumer 
demand has significantly weakened and that this weakened demand is not yet reflected 
in  import  volumes  as  orders  had  been  made  6  to  9  months  before,  i.e.  before  the 
economic  downturn.  Thus,  importers  expected  more  significant  drops  in  import 
volumes  in  the  next  season.  In  addition,  several  importers  reported  that  some  of  the 
major distribution chains either have gone into insolvency or have financial difficulties 
as  a  result  of  which  orders  have  been  cancelled,  the  importers'  stocks  are  increasing 
and  they  need  to  grant  special  discounts  to  their  customers.  Some  of  the  sampled 

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importers had yet announced major restructuring plans in view of the downturn, others 
reported that they increasingly tried to control costs by other means. 

(444)  It follows from the above that until July 2009 the impact of the crisis was still limited 
in  terms  of  import  and  sales  volumes  given  that orders were placed  before the crisis 
kicked in at the consumer level and were made based on more optimistic consumption 
expectations.  In  terms  of  profitability,  it  appears  that  most  importers  have,  so  far, 
managed to limit as well the impact of the crises by taking various measures aimed to 
control costs.  

4.7. 

Likely effect if measures are maintained 

(445)  Should measures continue, it is highly likely that those will affect importers more in 
the future as the  economic  parameters have changed significantly: with the  purchase 
price increases recently observed and the expected overall decrease in consumption the 
effect of the anti-dumping duty would become more apparent than it was in the past, 
even if the exchange rate development would cushion  the purchase price increase as 
happened  during  the  period  considered.  Moreover,  several  importers  indicated  that 
other  important  cost  increases  occurred  in  the  countries  concerned,  such  as  higher 
labour costs etc. All in all, profits on the product under review are likely to decrease in 
the  near  future,  but  also  to  a  large  part  due  to  other  cost  increases  than  the  anti-
dumping duties. However, as the importers generally generated healthy margins, this 
decrease would in all likelihood not endanger those companies.  

(446)  As evidenced since  2005,  importers would probably continue or start  to source  even 
higher  quantities  from  other  third  countries,  given  that  the  anti-dumping  duty  will 
affect  them  more.  At  the  same  time,  importers  will  likely  try  to  pass  on  a  higher 
proportion  of  any  general  cost  increase  to  retailers/distributors.  However,  given  the 
relative  importance  of  those  retailers/distributors  for  the  importers  (as  further 
explained  in  recital  (475)  below),  importers  are  not  likely  to  fully  pass  on  eventual 
cost increases to their clients. This has also been observed in the period July 2008 – 
March 2009. 

(447)  The  effect  of  the  maintained  anti-dumping  duties  in  a  period  of  shrinking  demand, 
rising  purchase  prices  and  increased  cost  awareness  of  consumers  on  the  importers 
would however be different depending on the flexibility of the importer. It is recalled 
that some importers have already proven a large flexibility in their sourcing strategies 
and in their product mix (more STAF and/or textile/plastic shoes and/or accessories). 
This allows them to mitigate the effect of the duty in the future. Other importers which 
maintain  their  traditional  sourcing  channels  in  the  countries  concerned  and  are 
focussing on leather footwear might indeed experience an overall drop in profitability 
and/or sales.  

4.8.  Comments 

(448)  As mentioned in recitals (60) et seqq., several interested parties claimed the exclusion 
of specific shoe types from the product scope. In addition, most parties submitted that, 
should it not be possible to revise the product scope in the current investigation, their 
imported  shoe  types  should  be  excluded  from  the  measures  under  Article  21  of  the 
basic  Regulation.  The  latter  claims  were  mostly  based  on  the  alleged  lack  of 
production (production capacity and willingness to produce) of these types of shoes in 

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the Community, which would entail the absence of competition with and injury to the 
Community  industry,  and  the  unfavourable  economic  environment  in  which  the 
measures  would  have  an  increasingly  negative  effect  on  importers,  distributors, 
retailers and consumers within the Community. 

(449)  In  this  respect  it  is  important  to  underline  that  significant  competition  was  found 
between the imports from the countries concerned and the type of footwear produced 
in  the  EU,  as  set  out  in  recital  (267)  et  seqq.  This  also  means  that  there  is  still  a 
significant production of leather footwear in the EU. More in general, it is also noted 
that the product scope cannot be modified, extended or reduced in the framework of an 
expiry  review  irrespective  of  the  eventual  evolution  of  the  production  pattern  in  the 
Community during the existence of the measure.  

(450)  Despite  the  above,  the  Commission  contacted  the  relevant  footwear  associations  in 
order  to  have  a  clearer  picture  of  the  types/quantities  of  certain  footwear  that  is 
produced in the EU. From that information collected, it appears that most of the shoes 
for which the above claim was made are (still) produced in the Community and that 
the production pattern has not significantly changed during the period of the existing 
measures.  The  information  gathered  does  not  allow  a  final  general  determination 
whether certain niche product types produced in the Community cover the demand for 
these products.  

(451)  Most  of  these  products  are  specific  niche  products  sold  to  specialized  consumers  in 
small  quantities,  have  high  quality  and  complex  technical  features  and  belong  to  the 
high price category i.e. horse riding shoes, bowling shoes or special sizes/narrow feet 
shoes. Therefore these product types would in principle fit in the general specification 
pattern  of  the  Community  producers.  By  imposing  or  maintaining  measures,  EU 
producers could be encouraged to invest again in such niche product type production 
or  to  increase  their  existing  production  capacities.  Otherwise  there  would  be  no 
incentive  at  all  for  EU  producers  to  invest  in  such  product  lines.  Moreover,  as 
measures  are  not  meant  to  stop  imports  and  did  not  do  so  in  the  case  at  hand,  it  is 
justifiable to have anti-dumping measures also on those niche product types, as long as 
no clear dividing line can be drawn between the different product types. In any event, 
as  far  as  the  niche  products  are  concerned,  the  limited  data  available  indicates  that 
their share in the overall imports is very limited and that therefore the impact of the 
measures on those product types is not considered to be disproportionate in relation to 
the vast majority of the imports.  

(452)  Certain  importers  of  sports  footwear  as  well  as  their  association  submitted  that  they 

would not have a viable alternative for their sourcing in the Community. 

(453)  In  this  respect  it  is  firstly  noted  that  the  information  collected  from  the  national 
footwear  associations  suggests  that  there  is  still  significant  production  of  sports 
footwear in the EU, although it cannot be excluded that demand would surpass supply 
in  that  segment.  Even  assuming  that  there  was  insufficient  production  of  sports 
footwear in the EU, the investigation showed that alternative sources of supply exist, 
such as Indonesia and India offering increasingly competitive prices, as shown above.  

(454)  It  has  been  further  argued  by  several  sampled  importers,  notably  the  larger  global 
footwear brands,  that they have long-term strategic relationships with certain factory 
groups  in  the  PRC  and  Vietnam  on  the  basis  of  high  quality,  social,  safety  and 

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environmental standards which took years to cultivate. Therefore, changing sources by 
relocating production would incur high costs and long lag times (12 to 18 months).  

(455)  In this respect it is important to underline that the anti-dumping measures concerned 
are not prohibitive; in other words, the fact that the measures have been imposed –to 
correct a trade distortion- has not resulted in a cessation of imports from the countries 
concerned  and  a  consequent  need  for  importers  to  source  from  other  countries. 
Notwithstanding  the  above,  the  investigation  showed  that  a  significant  degree  of 
flexibility  exists:  importers  usually  purchase  from  supplier  groups  with  production 
bases  in  several  Asian  countries.  These  groups  are  flexible  and  can  change  sourcing 
from  one  country  to  another,  if  there  is  an  incentive  to  do  so.  The  details  provided 
through the sampling exercise on the sourcing of the product in question since 2005, 
as summarized on an aggregate basis under recital (419) above, demonstrate that most 
of the sampled importers have, within 1 to 2 years, changed origin of a significant part 
of  their  sourced  leather  footwear.  A  large  non-sampled  importer  also  reported 
increased  imports  from  other  Asian  countries,  at  the  expense  of  imports  from  the 
countries concerned. Therefore, the information on the file demonstrates that, although 
extra costs might be involved, shifting production from one country to another is not 
considered  too  cumbersome  and  it  appears  to  be  rather  common.  The  argument  is 
therefore dismissed. 

(456)  It  was  also  submitted  by  the  importers'  associations  and  some  importers  that  the 
importers were now not anymore in a position to absorb the effect of the duties. It was 
claimed  that  during  the  period  2006-RIP,  the  negative  effect  of  the  measures  to  the 
consumers  had  been  (partly)  compensated  by  the  effect  of  the  exchange  rate 
development  since  2006,  but  the,  according  to  these  submissions,  reversal  of  the 
exchange rate development since the end of the RIP would have made an increase in 
their resale prices inevitable and result in higher prices for the consumers in the shops 
if duties be maintained.  

(457)  It  is  acknowledged  that  the  appreciation  of  the  Euro  versus  the  US  dollar  since  the 
imposition  of  the  anti-dumping  measures  has  been  significant  as  described  also  in 
recital (434) above. Indeed the exchange rate development has been beneficial to the 
importers of the product under review from the end of 2005 until the end of the RIP, as 
contracts with their suppliers are usually set in US dollars and the Euro appreciated by 
almost 30% as compared to the US dollar in the course of that period.  

(458)  As concerns the importers alleged inability of the importers to absorb the duty in view 
of  a  different  exchange  rate  development  since  mid-2008,  leading  to  higher  import 
prices  in  Euro's,  it  is  to  be  noted  that  the  profit  level  that  importers  achieve  on  the 
trading of the product under review, as analysed through the sample (see recital (430) 
above), was still healthy in the RIP. It suggests that importers would be in a position to 
continue to operate in a sustainable manner even if for a certain period the exchange 
rate  developments  would  be  to  their  disadvantage.  Moreover,  as  concerned  the 
exchange  rate  developments,  there  are  no  signs  that  the  Euro  is  in  a  free  fall  as 
compared to the US Dollar; on the contrary, whereas the Euro depreciated vis-à-vis the 
US Dollar from July to November 2008, it moved up again since then. It is therefore 
speculative to anticipate a depreciation of the Euro for the short and medium term. As 
concerns retail prices of leather shoes it should further be noted that there are several 
other  sources  for  leather  footwear  and  these  sources  are  increasingly  used  by 
importers. There are therefore no data on the file which would point at the necessity 

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for importers to fully pass on the duty to wholesalers/retailers, resulting in significant 
increases in prices at retail level. Therefore, the argument is not convincing. 

(459)  Some  of  the  importers,  most  of  them  pertaining  to  the  group  of  branded  footwear 
producers,  submitted  that  the  measures  would  harm  the  significant  "manufacturing 
value added" by them in the Community through their significant activities in the areas 
of  notably  design,  development,  branding  and  sourcing.  In  this  respect  the 
investigation confirmed that indeed many importers do not just simply trade shoes but 
are  also  engaged,  in  the  Community,  in  value-adding  activities  as  those  mentioned 
above. Such activities are generating significant high level employment.  

(460)  In this respect it is noted that the information provided by the sampled importers did 
not  point  at  any  decline  in  these  companies'  employment  allocated  to  the  product 
under  review  during  the  period  2005  -  RIP.  On  the  contrary,  the  aggregated 
employment figures of the sampled branded footwear producers point rather at a slight 
increase  in  such  employment.  This  follows  from  the  fact  that,  in  line  with  their 
purpose,  the  anti-dumping  measures  have  not  blocked  entrance  to  the  Community 
market of leather shoes originating in the PRC and Vietnam, but rather adjusted their 
price level in order to restore a level playing field. Moreover, the level of the duties is 
in this case modest and the importers can, in addition, switch origin – as they have in 
some  cases  indeed  done.  In  view  of  the  above,  the  argument  that  the  anti-dumping 
measures would jeopardize the high level jobs that these importers have generated in 
the Community is dismissed. 

4.9.  Conclusion 

(461)  On the basis of the above analysis it is definitively concluded that, during the period 
2006-RIP, the anti-dumping impact have had an impact on the economic situation of 
the  importers  of  the  product  under  review  in  the  Community,  but  this  impact  is  not 
considered  to  be  disproportionate  given  the  overall  strong  market  position  of  the 
importers  found  in  the  investigation.  The  limited  deterioration  of  the  economic 
situation of the importers appears to have continued during the nine months following 
the  RIP.  However,  the  sector  is  generally  speaking  in  a  good  shape  and  the  profits 
obtained on the product under review are still high. It is therefore considered unlikely 
that maintaining the measures would have a significant adverse effect on the interests 
of importers. 

4.10. 

Interest of the distributors/retailers 

4.10.1. General 

(462)  The  information  available  indicates  that  in  the  retail/distribution  market  in  the  EU 
roughly  60%  of  all  footwear  is  traded  by  the  “traditional”  specialist  distribution 
consisting  of  large  retailers  that  are  often  importing  shoes  themselves  and  so-called 
buying  groups  and  around  40%  of  all  footwear  is  traded  by  “non-specialist” 
distribution, consisting of supermarkets, clothing shops as well as department stores. It 
is  estimated  that  the  retailers/distributors  sector  in  the  Community  employs  around 
140 000 people in the sales of the product under review to consumers. To be noted that 
while  in  the  northern  EU  countries  larger  retailers  are  dominating,  in  the  southern 
Member States retailing is often done by SME's. 

EN 

88 

   EN 

 
(463)  Whereas the large retail chains did not wish to participate in the importers sample and 
did  not  respond  to  the  detailed  retailers'  questionnaire,  one  large  importer/retailer  as 
well  as  a  group  of  retailers  submitted  written  representations  and  were  granted 
hearings.  Consequently,  the  only  retailer  whose  replies  could  be  verified  is  Clark's, 
which cooperated as an importer.  

(464)  Replies to the questionnaire for associations of wholesalers, distributors and retailers 
were  received  from  the  European  association  of  fashion  retailers  (AEDT),  the 
European Branded Footwear Coalition (EBFC), the European Outdoor Group (EOG), 
EuroCommerce  representing  the  retail,  wholesale  and  international  trade  sectors  in 
Europe,  the  Federation  of  European  Sporting  Goods  Industries  (FESI),  the  Foreign 
Trade Association (FTA), the Dutch association of fashion, shoes and sports retailers 
the 
MITEX,  and  Svenskt  Sportforum.  No  supermarket  chain  responded 
questionnaire, however Lidl provided information on its purchases and resales of the 
product  under  review  between  2005  and  2008.  The  above  associations  and  retailers 
opposed  the  measures  and  any  prolongation  thereof,  basically  arguing  that  the 
measures  decreased  profitability  and  caused  many  retailers  to  search  for  alternative 
sources  of  supply.  They  have  also  claimed that the extension of  the  measures  would 
harm the European footwear industry which has successfully adapted to the challenges 
and  opportunities  of  modern  markets  which  outsource  manufacturing.  They 
maintained  that  the  measures  have  not  avoided  massive  delocalization  of  production 
which will not come back to the EU as Community producers are unable to fulfil the 
demand for a wide choice of quality footwear at low prices.  

to 

4.10.2. Purchase prices 

(465)  In order to assess the claim of decreased profit margins since the imposition of anti-
dumping  measures,  in  a  first  step,  an  analysis  of  the  distributors/retailers  purchase 
prices  of  the  product  under  review  as  compared  to  the  sales  prices  they  achieved 
during the period 2005 - RIP was made. As described in recital (427) above, based on 
the questionnaire replies of the sampled importers it appeared that the importers' resale 
prices, which equal the distributors/retailers' purchase prices, were stable or increased 
only slightly during the period 2005 - RIP.  

4.10.3. Resale prices 

(466)  In a second step, the development of the resale prices was examined, and, due to the 
lack of precise data submitted by retailers, information was collected from statistical 
offices  of  Member  States  which  altogether  represented  66%  of  the  Community 
population.  This  information  suggests  that  the  retail  price  development  during  the 
period  considered  had,  generally,  been  one  of  a  very  modest  increase,  as  the  below 
table shows: 

Table 23 
Average consumer prices in certain Member States (indexed) 

Germany 
"footwear" 
The Netherlands 

2005 

2006 

2007 

RIP 

100 

99.2 

100.3 

100.9 

EN 

89 

   EN 

 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
"footwear" 
"children footwear" 
France 
"chaussures de ville" 
United Kingdom 
"footwear" 
Spain 
"ladies footwear" 
"men's footwear" 
"children footwear" 
Italy 
"footwear" 

Source: national statistical offices 

100 
100 

100.7 
99.3 

101.4 
101.5 

103.1 
100.9 

100 

99.9 

101.1 

101.5 

100 

98.4 

99.6 

99.5 

100 
100 
100 

101.9 
101.6 
100.9 

102.6 
103.5 
102.6 

103.7 
104.1 
103.3 

100 

100.9 

102.0 

102.6 

(467)  The above mentioned categories of shoes, although not exactly matching the product 
definition, are dominated by the product in question and the trends above can therefore 
be  considered  as  a  valid  reference  for  the  retail  sales  prices  of  the  product  under 
review. 

(468)  The above trends were further confirmed by several interested parties which submitted 
that the retail prices had remained relatively stable for a longer period and in any case 
throughout the period 2005 - RIP. They explained the fact that the prices of shoes at 
retail level had been stable for such a long period by (i) favourable cost factors as the 
continuous shift of production to low cost countries and the favourable exchange rate 
development and (ii) the principle of "price points" which is applied by retailers and 
the consumer willingness to pay. The principle of "price points" is the fact that shoes 
are  usually  sold  at  fixed  price  points  and  not  in  between,  for  example  a  category  of 
shoes is sold at €44,95, one category up 
etcetera.  

is €49,95, one category  further up is €54,95 

4.10.4. Profitability 

(469)  As  the  information  submitted  by  retailers  was  not  detailed  enough,  it  has  not  been 
possible  to  directly  obtain  retailers'  profitability  data.  However,  comparing  the 
retailers'  purchase  price  development,  as  mentioned  under  recital  (465)  above,  with 
their resale price development, as mentioned under recital (466)-(468) above, there is 
no  sign  of  shrinking  profit  margins  which  can  be  attributed  to  the  cost  effect  of  the 
duties as the purchase prices of the product under review remained stable or increased 
slightly, whereas the resale prices increased slightly. 

(470)  As  concerns  the  general  level  of  profitability  of  the  retail  sector,  there  are  some 
indications  that  this  is  lower  than  the  profit  level  achieved  by  the  importers. 
Furthermore, according to the specialized press, some regions in particular appear to 
be  particularly  competitive  and  difficult  from  a  retailers'  point  of  view  (strong 
competition, consolidation process in the market, strong dependence on the financial 
market which is reluctant to invest and strategic failures). At the same time, however, 
one  of  the  largest  shoe  retail  chains  operating  in  the  Community  reported  record 
profits in 2008 in the press and announced ambitious expansion plans.  

EN 

90 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
(471)  As concerns the retailers' overall profitability, it should also be noted that the effect of 
the anti-dumping duty is, in any case, diluted by the turnover achieved on their other 
products like STAF, leather footwear from other origins, other kinds of footwear and 
accessories.  

(472)  To  conclude,  the  argument  of  decreasing  profitability  was  not  substantiated  by  the 
retailers during the review investigation and also the findings of the investigation did 
not  support  such  a  statement.  From  the  information  available  it  appears  to  be  more 
likely  that  the  imposition  of  anti-dumping  measures  did  not  negatively  affect  the 
retailers from 2006 until the RIP, or just to a limited extent.  

4.10.5. The impact of the economic downturn post-RIP 

(473)  The  limited  information  available  concerning  the  impact  of  the  economic  downturn 
post-RIP on the footwear retail sector points at decreasing margins and weakening of 
demand during the first nine months following the RIP. However, the information was 
submitted only by one company, mainly operating in one specific region, which is also 
operating  as  importer  and  can  therefore  not  be  considered  as  representative  for  the 
retail  sector  in  general.  Furthermore,  specialized  press  has  reported  a  significant 
improvement  of  the  shoe  retail  sector  situation  in  that  region  (with  increasing  sales 
volumes and revenues) since mid-2009. Consequently, in the absence of representative 
cooperation  from  the  retail  sector,  no  final  conclusions  could  be  drawn  on  the  exact 
impact of the economic downturn.  

4.10.6. Likely effect if measures are maintained 

(474)  Against  the  background  of  the  current  economic  downturn,  it  is  likely  that  the 
consumption  of  leather  footwear  will  decrease  and  the  price  pressure  exerted  by 
increasingly price sensitive consumers will increase in the short to medium term. On 
the other hand, importers would likely try to pass on at least partly their price increases 
to  retailers.  Thus  the  retailers'  sandwich  position  between  importers  and  consumers 
could lead to an increasingly difficult situation.  

(475)  Those  retailers/distributors  operating  in  very  competitive  markets  and  sourcing 
predominantly  leather  shoes  from  the  countries  concerned  could,  in  such  a  scenario, 
end  up  in  a  fragile  situation  given  their  relatively  high  costs  and  relatively  low  net 
margins.  A  repeal  of  the  anti-dumping  measures  on  the  product  under  review  would 
offer such companies relief in that scenario. For those retailers/distributors, however, 
that are sourcing also from third countries/EU and that have a more diversified product 
mix,  the  impact  of  possible  price  increases  will  likely  be  diluted  in  the  turnover. 
Moreover,  the  investigation  has  shown  that  although  being  in  a  particular  market 
position,  the  importance  of  large  retailers  and  retailer  buying  groups  is  sufficiently 
significant to prevent importers to fully pass on cost increases. 

(476)  To conclude, those retailers which continue to source predominantly the product under 
review  will  suffer  more  from  any  prolongation  of  the  measures  while  those  retailers 
with  a  more  mixed  and  flexible  business  model,  switching  their  sourcing  to  other 
alternative sources and diversifying their product mix, will probably be less affected - 
although they might suffer more than during the RIP. 

4.10.7. Comments  

EN 

91 

   EN 

 
(477)  It  was  argued  that  the  measures  had  caused  many  retailers  to  search  for  alternative 
sources of supply. The information on the file shows that some retailers might indeed 
have changed their sourcing, but none of the retailers or its associations reported that 
there were shortages of supply or even difficulties to find alternative sources following 
the  imposition  of  measures.  Thus,  while  indeed  several  retailers  have  looked  for 
alternative  sources,  the  information  suggests  that  they  were  successful  in  finding 
competitive  alternative  sources  of  supply.  While  it  is  acknowledged  that  this  effort 
was  time-consuming  for  some  retailers,  this  is  considered  to  be  an  indirect,  not 
disproportionate effect of the imposition of measures as compared to the benefits for 
the European producers suffering from dumped imports. 

(478)  It  was  submitted  by  several  interested  parties  that  the  favourable  cost  factors  which 
had been in place during the period considered, as summarized in recital (468) above, 
had  ended.  Instead,  since  the  end  of  the  RIP,  the  exchange  rate  development  would 
have developed negatively and the production costs in the PRC and Vietnam were on 
the  rise  again.  Consequently,  if  the  measures  would  be  maintained,  this  would  bring 
the retail sector in a difficult situation, having to move up price points. This would not 
only result in higher prices at retail level but also less turnover and, in view of the high 
fixed cost, a strong decrease of profit.  

(479)  As  mentioned  in  recital  (457)  above,  it  is  highly  speculative  to  anticipate  a 
depreciation  of  the  Euro  on  the  short  and  medium  term.  Moreover,  whereas  rising 
costs in the PRC are likely to affect the importers' position, the argument is not valid 
for  retailers  as  the  information  on  the  file  on  sales  prices  of  importers  to  retailers, 
during  the  period  considered  and  post-RIP,  demonstrates  that  price  increases  were 
passed on to retailers to a limited extent only. That points at a generally strong market 
position of retailers.  

(480)  Therefore,  whereas  it  is  acknowledged  that  the  principle  of  "price  points"  is  widely 
used in the footwear retail sector and that it allows for smaller price increases to attract 
less attention from the consumer, there are no indications on the file that retailers are 
confronted with an overall significant increase in purchase prices of the product under 
review.  There  is,  consequently,  no  evidence  on  the  file  that  they  would  have  to,  in 
general, move up price points for the product under review. Furthermore, even if they 
would have to do so for certain specific models, the effect of that could be neutralized 
by changing sources or product mix. In view of the above, the argument is dismissed. 

4.11.  Conclusion  

(481)  To conclude, based on the limited information available, there are no indications that 
the  measures  had  a  significant  adverse  effect  on  the  financial  situation  of 
distributors/retailers during the period 2006-RIP. Taking into consideration the likely 
effects of the economic downturn post-RIP, notably in view of the retailers' sandwich 
position between importers and consumers and the possibly modest profits of retailers, 
it can however not be excluded that the financial situation of those retailers which are 
predominantly  selling  the  product  under  review  will  deteriorate.  It  is  however  noted 
that the retailers are free to source their products from other  origins  and to  diversify 
the  products  offered  so  that  they  can  mitigate  the  effects  of  anti-dumping  duties  in 
their turnover. In general, retailers are in a much more favourable market position than 
EU producers as they have the above described flexibility whereas the EU producers 
are fully exposed to the price pressure exerted by the imported dumped products.  

EN 

92 

   EN 

 
4.12. 

Interest of the consumers  

4.12.1. General  

(482)  The  Commission  contacted  39  consumer  associations  in  the  Community  to  inform 
them  about  the  initiation  of  the  expiry  review.  These  associations  were  explicitly 
invited  to  explain  their  position  on  the  existing  measures  and  to  provide  any  other 
information that might be relevant for the investigation. Three consumer organisations 
came forward as an interested party and submitted comments in writing. 

(483)  Two  national  consumer  associations  indicated  their  support  for  the  anti-dumping 
measures. One of them specifically mentioned that, even with the measures imposed, 
prices  of  footwear  from  the  countries  concerned  remain  very  low.  The  European 
consumers'  organisation  BEUC  opposed  the  measures,  inter  alia  arguing  that  the 
measures were harmful to the consumer. 

(484)  In this respect, in the original investigation, the impact on consumers was predicted to 
be  limited  assuming  that  the  relatively  moderate  duty  rates  would  be  diluted  in  the 
different  layers  of  the  distribution  chain  and  not  fully  be  passed  on  to  consumers. 
Nevertheless,  a  "worst  case"  scenario  was  drawn  up,  i.e.  a  full  pass-on  to  consumer 
was  estimated.  The  estimation  in  the  original  case  was  a  maximum  increase  of 
consumer prices by 2%, or 1 € per pair.  

(485)  The  results  of  the  review  investigation  indeed  demonstrate  that  consumer  prices  of 
leather shoes only increased slightly since the imposition of the measures (see recital 
(466)-(468)  above).  The  increase  in  average  shoe  retail  prices  as  reported  by  the 
national statistical offices of the group of representative Member States mentioned in 
those  recitals  and  in  table  23  is  between  -0,5%  and  +4,1%,  which  is  lower  than  the 
reported inflation in that period. 

(486)  On  the  basis  of  the  analysis  of  import  prices,  it  was  also  established  that  prices  of 
leather  footwear  from  the  PRC  and  Vietnam  remained  relatively  low,  even  after 
adding  the  anti-dumping  duties  (see  recital  (424)  above).  Therefore,  from  the 
information on the file, it does not appear that the measures have harmed consumers to 
a significant degree. 

4.12.2. Other comments 

(487)  Several interested parties argued that the measures were harmful to the consumers, and 
that they have resulted in higher prices. It was also argued by certain importers that the 
impact of the measures on consumers would become much more noticeable now that 
they could not longer absorb the duties. 

(488)  As  mentioned  in  recital  (485)  above,  there  anti-dumping  duties  appear  not  to  have 
resulted  in  a  noticeable  increase  of  retail  prices.  As  regards  the  alleged  inability  of 
importers to absorb the duties, the post-RIP analysis gives already some indications in 
that respect. Indeed, as explained in recital (441) above, during the period July 2008 to 
March  2009  the  importers'  purchase  prices  increased  strongly  whereas  their  resale 
prices  remained  stable  or  increased  slightly  at  most.  That  information  suggests  that 
importers would not necessarily need to pass on any cost increase to the next level in 
the distribution chain. The argument is therefore rejected. 

EN 

93 

   EN 

 
(489)  One interested party claimed that the measures would result/had resulted in a reduced 
choice of leather footwear for consumers, notably a lack of middle/to low end leather 
shoes  at  affordable  prices.  This  claim  had  already  been  made  during  the  original 
investigation. 

(490)  The  above  claim  was  not  substantiated.  Moreover,  in  view  of  the  stable  retail  prices 
over  a  long  period  in  time,  it  is  unlikely  that  consumers  would  loose  interest  in  the 
product in question for reasons of price evolution. It is also noted that apart from one 
association which claimed that measures would have led to less choice for consumers 
without substantiating this argument by evidence, no other retailer or retail association 
complained about reduced choice or a shortage of supply. Even if the investigation has 
confirmed that the choice of consumers has slightly shifted away from the product in 
question, given the modest decrease of consumption of leather shoes observed during 
the period considered and the increased demand for textile shoes, this can however be 
attributed  to  changing  fashion  trends  rather  than  to  a  reduced  choice  of  leather 
footwear. 

5. 

Conclusion on Community interest 

(491)  It follows from the above that a significant part of the Community industry producers 
has  improved  its  situation  since  the  imposition  of  anti-dumping  measures  and  has 
proven  its  viability  by  adapting  their  business  models  to  the  challenges  of  the 
globalised  market.  Should  measures  be  maintained,  they  will  serve  as  an  additional 
safety net and allow for more time to continue this process. Should measures lapse, the 
price  pressure  of  the  dumped  imports  on  the  mid  to  low  end  products  will  likely 
impact  also  on  the  higher  end  products  and  eventually  affect  all leather  footwear.  In 
this  scenario,  it  is  likely  that  more  EU  producers  will  go  into  bankruptcy  given  that 
due to their predominant small to medium size, they are financially more vulnerable.  

(492)  On the other hand, the impact of the anti-dumping duties from 2006 until the RIP on 
importers,  retailers/distributors  and  consumers  was  not  disproportionate.  Should 
measures  continue  and  assuming  that  consumer  demand  will  further  weaken  in  the 
wake of the economic crisis, the impact of the anti-dumping duties on all players will 
in all likelihood be higher than in the past. However, given the generally healthy state 
and  proven  flexibility  of  the  importers  and  the  general  strong  market  position  of 
retailers/distributors  that  can  diversify  their  product  mix  considerably,  it  can  be 
assumed that those operators will not disproportionately suffer in the short to medium 
term.  As  regards  consumers,  there  was  no  noticeable  price-increase  following  the 
imposition of the anti-dumping duties and, also taking into account the results of the 
post-RIP  analysis,  there  are  no  indications  that  consumer  prices  will  increase 
disproportionately in the future. 

(493)  To  conclude,  the  review  investigation  did  not  bring  to  light  any  compelling  reasons 

why the anti-dumping measures should not be maintained.  

L. COMMENTS FROM INTERESTED PARTIES FOLLOWING DISCLOSURE 

(494)  A number of comments were received following disclosure of the findings. However, 
none of these were such to alter the conclusions. The main arguments raised were as 
follows. 

EN 

94 

   EN 

 
 
1. Interest of the Community industry 

(495)  After disclosure of the definitive findings, one interested party claimed that it were not 
the anti-dumping measures that helped the Community industry, but the restructuring 
efforts only. This claim was not only without further substantiation, but it also ignores 
the objective findings of this review investigation. Notably, it ignores the coincidence 
in  time  between  the  imposition  of  the  anti-dumping  measures  and  the  stabilisation 
process of the Community industry. Indeed, since the imposition of the measures, the 
massive  increase  of  low  priced,  dumped  imports  stopped  and  combined  imports  fell 
from  a  market  share  of  35,5  %  to  28,7%.  This  decrease  of  dumped  imports  on  the 
Community market alleviated the price pressure exerted by those low priced footwear 
and helped the Community industry to continue with its restructuring efforts.  

(496)  It  was  also  reiterated  that  the  EU  cannot  mass  produce  and  due  to  the  consequent 
missing economies of scale it would not be able to satisfy the strong demand in the EU 
of  cheaper  shoes.  Firstly,  it  is  pointed  out  that  this  claim  was  not  substantiated. 
Secondly,  amongst  the  Community  producers,  there  are  also  a  number  of  bigger 
producers of lower segment shoes with lower sales prices, some of them having been 
analysed  in  the  sample.  Moreover,  with  regard  to  the  claim  that  the  Community 
industry would not be in a position to deliver the required volumes, it is noted that the 
investigation  showed  that  most  of  the  larger  importers  selected  in  the  sample  do  not 
only order from one single supplier, but also source relatively smaller volumes from 
several suppliers. This, together with the effects of the "clustering model" as set out in 
section E.2., whereby work forces of several smaller companies are combined, should 
logically also enable the Community industry to produce bigger volumes. This claim 
is therefore rejected.  

(497)  Two interested parties claimed that  the situation of globally outsourcing Community 
producers  was  not  analysed  in  the  same  detail  as  was  done  for  the  sampled 
Community producers. It is however noted that the analysis included an assessment of 
all  interested  parties  to  the  extent  that  they  cooperated  in  the  investigation.  For 
example,  the  interest  of  a  large  Community  producer  who  was  excluded  from  the 
definition of the Community industry because of its import volumes, see recitals (404) 
et seqq, was examined in quite some detail. It should also be noted that companies in 
the EU which have outsourced the majority of their production to third countries are to 
be technically considered in anti-dumping investigations as importers and the situation 
of importers has fully been taken into account and analysed in recitals (410) et seqq. 

(498)  One party pointed out that there was a wrong assessment of the interests of formerly 
sampled  EU  producers  as  some  of  them  were  allegedly  against  the  continuation  of 
measures. This is however not correct, as even the company that did not see the benefit 
for itself claimed that measures helped to curb dumped imports. One other company 
only mentioned that it is difficult for them in the economic crisis to foresee the exact 
effect of anti-dumping duties in the future, but this company did not mention that the 
duties were without merit. Thus, even the parties that did not explicitly mention that 
they directly benefited from measures have pointed out that measures have brought the 
indirect benefit of curbing imports from China and Vietnam. 

(499)  It  is  therefore  definitely  confirmed  that  overall  the  Community  producers  benefited 
from the measures and showed their capacity to improve their situation once measures 
mitigated the effects of injurious dumping.  

EN 

95 

   EN 

 
2. Interest of the unrelated importers  

(500)  Several  interested  parties  criticised  in  general  that  the  interests  of  anonymous 
complainants  would  be  protected  whereas  the  interests  of  importers,  other  economic 
operators as well as consumers would have been largely disregarded. It is noted that 
the  imposition  of  the  anti-dumping  duties  was  overall  found  to  be  beneficial  for  the 
Community  producers  and  not  found  to  be  disproportionately  negative  for  the  other 
relevant operators. The allegation of discrimination between those parties is however 
strongly rejected as the same  treatment was offered to all parties in the investigation 
and  all  interests  of  cooperating  economic  operators  such  as  importers,  retailers, 
outsourcing  EU  producers  and  consumers  were  carefully  considered  and  analysed  in 
the investigation.  

(501)  Several  parties  claimed  that  the  importers'  profits  would  not  be  high  enough  to 
shoulder  increased  import  costs,  exchange  rate  developments,  cost  of  switching  to 
other  sources  of  supply  and  anti-dumping  duties.  This  claim  has  however  not  been 
sufficiently substantiated. As shown in table 22, the order of magnitude of the profit of 
importers, i.e. around 20%, is such that it appears that they still have room to shoulder 
the aforementioned costs.  

(502)  It has been claimed that the employment figure given for importers, i.e. around 23 000 
people,  is  too  low  as  it  would  not  include  "value  adding  jobs"  in  the  EU.  This  is 
however  not  true.  The  employment  figure  of  importers  has  been  calculated  on  the 
basis of the verified employment figures of the sampled importers which also included 
high value adding jobs, such as design, marketing, R&D, branding etc., attributable to 
the  product  concerned.  All  verified  employment  figures  were  added  and  put  into 
relation  to  the  import  volume  of  the  product  concerned  of  the  sampled  importers. 
Then,  this  result  was  extrapolated  to  the  overall  import  volume  from  the  countries 
concerned. Thus, it the employment figure established included also significant "value 
adding jobs" in the EU. 

(503)  Some  parties  have  claimed  that  the  argument  that  importers  could  easily  switch 
sources  of  supply  is  factually  incorrect  and  simplistic.  One  interested  party  claimed 
that there were no alternative sources of supply. In this respect, it is noted that it was 
never  stated  that  switching  sources  of  supply  would  be  easy.  The  Commission  does 
not  deny  that  switching  suppliers  might  entail  extra  costs  and  requires  time  and  that 
some  importers  have  long  terms  relationships  with  their  suppliers.  Based  on  the 
information gathered from the sampled importers and another non-sampled importer, 
it  could  however  be  concluded  in  recital  (455)  of  the  Regulation  that  a  significant 
degree of flexibility existed and that any additional efforts to switch sources were not 
such as to prevent those operators from doing so. Indeed, those importers significantly 
increased their supply from other third countries as shown in table 19. The same trend 
was observed for non-sampled importers, given that Eurostat shows an increase of 4 
percentage points as regards imports from other third countries (table 7).  

(504)  Some  interested  parties  argued  that  the  continuation  of  measures  will  intensify  job 
decline in the EU, certainly with regard to importers and retailers. This claim was not 
substantiated by the interested parties. Moreover, the file shows that, as concerns the 
sampled importers, employment related to the product under review increased by 6% 
from 2005 to the RIP.  

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(505)  It was claimed that an analysis of potential benefits of discontinuation of measures to 
importers was missing. In this regard, it is noted that based on the wording of Article 
21 of the basic anti-dumping Regulation, it has to be analysed if there are compelling 
reasons not to impose anti-dumping measures. In the framework of an expiry review 
this means that it has to be analysed if there exist compelling reasons not to maintain 
the  measures,  i.e.  negative  effects  of  a  prolongation  of  those  measures  have  to  be 
identified and those effects have to be balanced against the benefits of the Community 
industry in order to assess if those negative effects are disproportionate. Thus, from a 
legal  point  of  view,  the  opposite  scenario,  i.e.  letting  measures  expire,  would  only 
need to be further analysed if there are specific indications in the case that this would 
constitute  a  disproportionate  burden  for  importers,  retailers  or  consumers.  No  such 
indications were found. However, and for the sake of the argument only, the following 
could be said about the likely effects on importers, retailers and consumers if measures 
would lapse. As regards importers, the investigation showed that a certain part of their 
loss  of  profitability  from  2005  until  the  RIP  could  be  attributed  to  the  anti-dumping 
duties paid. Should measures lapse and all other costs remain stable, these costs would 
disappear and in that respect, the profit levels might increase to a level higher than the 
roughly  20%  found  during  the  investigation.  For  retailers,  it  is  unclear  from  the 
information  on  file  whether  they  would  benefit  from  an  expiry  of  the  measures, 
because  the  sampled  importers  did  not  always  adapt  their  resale  prices  in  case  the 
import  prices  dropped,  as  it  can  be  seen  by  a  comparison  of  the  arithmetic  average 
import price and arithmetic average resales price from 2007 to the RIP. As regards the 
effect  on  consumers,  it  is  even  more  unlikely  that  an  expiry  of  the  measures  would 
lead  to  decreasing  prices,  given  that  retail  prices  remained  largely  stable  despite  the 
price movements at import level from 2005 until the RIP. Moreover, it is unlikely as 
well  that  consumers  would  benefit  via  an  increased  choice  given  that  there  is  no 
evidence on file demonstrating that the choice for the consumers was affected by the 
imposition  of  anti-dumping  duties.  In  any  event,  all  this  cannot  alter  the  overall 
conclusions that there are no compelling reasons not to maintain the measures. 

(506)  Some  importers  and  their  associations  claimed  that  the  impact  of  the  crisis  was 
underestimated  and  that  the  effects  of  the  downturn  will  continue  to  worsen.  Firstly, 
these claims have been insufficiently substantiated as not concrete data relating to the 
product  concerned  was  submitted.  As  stated  in  recitals  (439)  et  seqq.  of  the 
Regulation, the impact of the crisis has been analysed until June 2009 on the basis of 
best data available i.e. an additional questionnaire was sent out in order to have a look 
specifically at this issue. On the basis of the information collected, a prudent analysis 
of the data obtained was done and it is clear that this analysis is mainly based on data 
until June 2009. It can thus not be ruled out that the impact of the economic crisis on 
consumption  and  prices  is  worse  than  it  was  until  June  2009,  but  it  can  still  be 
concluded  that  given  the  profit  level  well  above  15%,  the  importers  are  unlikely  to 
suddenly be disproportionately affected by the isolated effect of anti-dumping duties. 
This is all the more true as the market situation post June 2009 showed mixed signals 
with signs of improvement in some Member States. Therefore, it is not apparent at this 
stage  that  the  impact  of  the  crisis  has  been  seriously  underestimated.  It  is  moreover 
noted that by looking at the above data, the Commission went well beyond their legal 
obligations  as  Article  6(1)  of  the  basic  Regulation  explicitly  states  that  information 
relating to a period subsequent to the investigation period shall, normally, not be taken 
into account.  

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(507)  Lastly, some parties reiterated their claim that some product types should be excluded 
from  the  anti-dumping  measures  under  Community  interest  aspects  as  there  is  only 
negligible  production  of  notably  sports  and  outdoor  footwear  left  in  the  EU.  It  was 
alleged that the decline in the EU production would constitute changed circumstance 
that have to be taken into consideration in the expiry review. It is firstly recalled that it 
is  not  possible  to  modify  the  scope  of  the  measures  in  the  framework  of  an  expiry 
review pursuant to Article 11(2) of the basic Regulation as stated in recital (61) of this 
Regulation.  Even  assuming  that  it  would  be  legally  possible,  quod  non,  it  is  pointed 
out  that  this  claim  of  decreasing  production  was  already  made  in  the  original 
investigation  and  rebutted  in  recitals  (28)  and  (38)  of  the  definitive  Regulation.  As 
those  parties  did  not  submit  any  new  substantiated  evidence  to  demonstrate  to  what 
extent  the  EU  production  of  those  footwear  types  shrank  in  relation  to  the  original 
investigation, the claim is rejected and the findings as described in recital (453) of this 
Regulation are hereby confirmed.  

3. Interest of the distributors/retailers  

(508)  One  interested  party  claimed  that  the  analysis  distinguished  artificially  between 
importers  and  retailers  and  that  the  interest  of  integrated  companies  that  have  to 
shoulder the whole burden of the measures was not taken into consideration. Firstly, it 
is noted that the only company which cooperated as a retailer was in fact an integrated 
importer/retailer,  as  indicated  in  recital  (463)  above,  so  the  specificity  of  those 
integrated companies was represented both amongst the sampled importers and in the 
retailers' analysis. Secondly, all information provided by other retailers which did not 
fully cooperate in the investigation was also taken into account. The Commission thus 
considered  and  analysed  all  available 
integrated  companies. 
Considering the above, the claim that the interest of integrated companies had not been 
taken into account cannot be upheld. 

information  on 

(509)  Some interested parties expressed a general criticism claiming that the impact of the 
measure  on  retailers  was  not  analysed  in  sufficient  detail.  This  claim  was  not 
substantiated. As described in recitals (462) et seqq., the Commission pro-actively and 
repeatedly  tried  to  gather  information  from  retailers  but  apart  from  one  integrated 
importer/retailer  that  cooperated  as  an  importer,  no  retail  chain  accepted  to  fully 
cooperate in the investigation. Despite the limited cooperation of retailers, the analysis 
considered, to the extent possible, all information available on the retail sector such as 
written  submissions  by  interested  parties,  information  provided  in  hearings,  market 
intelligence,  studies  and  specialized  press.  In  view  of  the  above,  the  claim  that  the 
impact  of  the  measures  on  retailers  was  not  analysed  in  sufficient  detail  must  be 
rejected. 

(510)  A number of parties claimed that the Commission did not take into account publicly 
available  information  on  retailer  profitability.  One  party  argued  that  the  profitability 
data collected from publicly available financial reports of major EU retailers shows a 
deeply worrying situation which the analysis has disregarded. In the same vein, some 
parties  have  considered  that  the  severe  effects  of  the  economic  crisis  on  the  retail 
sector were not taken into account. It was argued that although one of the largest shoe 
retail  chains  reported  record  profits  in  2008,  this  is  the  exception  to  the  rule  and 
smaller  retailers  suffer  severely.  In  this  respect,  it  is  reiterated  that  there  was  very 
limited cooperation from retailers, as only one retailer/importer cooperated fully in the 
investigation.  Moreover,  neither  before  nor  after  disclosure  any  specific  information 

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was submitted as regards the profit of retailers with regard to leather footwear or the 
product concerned. In spite of this, the Commission took into account and analysed a 
variety  of  other  sources  of  information  such  as  submissions  from  retailers,  market 
information,  press  reports  which  pointed  to  a  wide  variability  of  profits  in  the  retail 
sector:  whereas  some  retailers  indeed  appeared  to  have  experienced  decreasing 
margins  and  weakening  demand,  specialized  press  reported  increasing  sales  and 
revenues for others. Thus, the publicly available information referred to by the parties 
above  was  considered  but  proved  to  provide  only  a  partial  picture  and  therefore  a 
variety  of  other  information  sources  were  used  which  indicated  a  wider  spread  of 
profits.  Consequently,  the  impact  of  the  economic  downturn  on  retailers  has  been 
analysed  to  the  extent  possible  on  the  basis  of  information  available.  The  claim  that 
the profitability of retailers has not been correctly analysed must therefore be rejected. 

(511)  Some  parties  objected  to  a  reference  to  the  general  level  of  profitability  of  the  retail 
sector and to a turnover achieved on other footwear as they consider this irrelevant for 
the investigation. One party argued that if it was stated by the investigation authority 
that the effect of measures on retailers had been diluted by sales of other products, a 
similar  analysis  should  have  been  made  for  Community  producers.  It  is  noted  that 
retailers  and  Community  producers  of  the  like  product  are  in  a  different  situation 
insofar  as  they  produce  mainly  leather  footwear  while  retailers  usually  have  a  wider 
portfolio  of  other  products.  The  statements  made  in  recitals  (475)  et  seqq  remain 
therefore valid.  

(512)  Some  parties  questioned  the  accuracy  of  the  employment  figures  of  the  retail  sector 
and considered  that more jobs were at  stake without substantiating this argument. In 
this respect, it is to be noted that the employment figure of the retail sector as indicated 
in recital (462) was calculated on the basis of the verified employment figure, related 
to the retail function and allocated to the product under review, of the only cooperating 
importer/retailer.  An  estimation  was 
the  above 
employment figure on the basis of the volumes retailed by this company as compared 
to total volumes of the product under review retailed on the EU market. This estimate 
was  then  cross-checked  with  submissions  from  other  parties  and  with  market 
intelligence  sources  which  confirmed  the  order  of  magnitude  established  by  the 
Commission. The above argument is therefore rejected. 

then  made  by  extrapolating 

(513)  It was argued by several parties that it was difficult for retailers to switch sources, in 
particular  for  SMEs,  as  they  had  long  and  trusted  relationships  and  the  expense  of 
switching suppliers and the delays involved could be prohibitive. Some parties argued 
that in the current economic downturn relocation costs were particularly hard to digest 
for  retailers.  In  this  respect  it  is  recognised  that  switching  costs  might  cause  some 
problems for some retailers in times of economic crisis. However, the Commission did 
not  find  that  the  costs  and  the  delays  involved  in  switching  sources  of  supply  were 
prohibitive.  In  fact,  information  gathered  during  the  investigation  suggested  that 
several  retailers  had  looked  for  alternative  supplies  and  had  switched  without  a 
disproportionally negative effect. The above argument cannot therefore be upheld. 

(514)  One  party  pointed  out  that  the  increased  cost  of  leather  footwear  from  China  and 
Vietnam, in addition to the measures, made it uncompetitive to continue sourcing from 
these countries. The argument that sourcing from the countries concerned is no longer 
competitive was not substantiated and does not seem to be compatible with the finding 
that imports from the countries concerned still have a combined market share of 28% 

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during  the  RIP.  Moreover,  the  allegation  that  there  are  other  increasing  costs  in  the 
countries  concerned that  have a bearing on sourcing decisions of importers confirms 
the  finding  of  the  Commission  in  recital  (406)  et  seqq.  that  there  seem  to  be  other 
factors  than  the  anti-dumping  duty  which  have  an  impact  on  the  decision  of 
importers/retailers to switch supplies. As there are many other factors in play, it is not 
possible to attribute all negative impact to the measures.  

(515)  Several parties claimed that it had not been sufficiently considered that consumer price 
points prevented small price increases being passed on to consumers. This statement in 
fact confirmed the finding of the Commission that the price increases to retailers were 
too  small  to  be  translated  to  any  significant  extent  at  consumer  level.  In  this  respect 
reference is made to recital (480). 

(516)  One party held that the analysis did not take into consideration the tough price battle in 
the  retail  sector.  This  argument  is  rejected  as  the  strong  retail  competition  was 
considered in the analysis as described in recital (470). 

4. Interest of the consumers 

(517)  Several parties argued that consumer price increases were higher than what was found 
in the investigation and, if the measures were extended, consumer prices would further 
increase.  Others  questioned  the  accuracy  of  the  figures  used  by  the  Commission  for 
consumer prices alleging that they did not cover all Member States and included other 
products  than  the  product  concerned.  Two  parties  complained  that  the  industry 
monitor  information  on  retail  prices  submitted  by  one  of  them  had  not  been 
considered. It should be recalled in this respect that all information submitted on retail 
prices  had  been  analysed  in  the  investigation,  reference  is  made  to  recitals  (466)  to 
(468)  and  (485).  In  fact,  the  Commission  used  a  number  of  sources  to  establish  the 
evolution  of retail prices, namely information from cooperating parties (resale prices 
of  wholesalers,  purchase  prices  and  resale  prices  of  the  cooperating  importer/retailer 
and  other  retailers  submitting  information);  statements  by  a  number  of  interested 
parties that consumer prices had not increased as well as information from statistical 
sources. This latter source, presented in table 23, was found to be more reliable than 
the  industry  monitor  information  on  retail  prices  referred  to  above  for  the  following 
reasons.  In  fact,  the  data  submitted  by  this  party  was  considered  narrower  and  less 
representative as it contained only a very small part of the product scope and it omitted 
one  important  consumer  market,  namely  the  UK,  a  very  competitive  retail  market 
according to interested parties. In contrast, the information presented in table 23 was 
gathered  from  national  statistical  offices  (including  the  UK  which  reported  a  slight 
decrease  in  consumer  prices  between  2005  and  RIP)  and  was  dominated  by  the 
product concerned. In any event, the information provided by interested parties during 
the  investigation  showed  moderate  price  increases  or  even  decreases.  On  these 
grounds the above arguments had to be rejected. 

(518)  One  party  claimed  that  consumers  had  difficulties  in  obtaining  high  quality  and 
reasonably  priced  products.  This  argument  was  not  substantiated  and  is  therefore 
dismissed. 

(519)  One  party  argued  that  the  decreasing  consumption  of  leather  footwear  showed  the 
negative impact of the measures on consumers, without, however, substantiating this 
argument. As described in recital (485), consumer prices have remained largely stable 

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and  therefore  there  has  been  no  negative  impact  on  consumers.  The  Commission 
found a number of factors which had led to a decreasing consumption of leather shoes, 
including changing fashion trends, and therefore it was not possible to conclude that 
decreasing consumption would be attributable to the measures. The above argument is 
therefore dismissed. 

5. Other comments following disclosure  

(520)  Two  parties  claimed  that  the  Community  interest  analysis  was  incomplete  as  the 
interests of EU logistic providers (shipping companies etc) were not taken into account 
in  the  Community  interest  analysis.  It  is  to  be  noted  that  no  such  operator  came 
forward  and  requested  that  its  views  be  taken  into  account  and  no  information  has 
been submitted in this respect. Thus, the claim that the Community interest analysis is 
incomplete in that respect is rejected. In the same vein, some parties claimed that the 
positive effects of letting measures lapse should have been analysed in the Community 
interest part. As to this claim, it is referred to the explanation given in recital (505) of 
the Regulation why such an analysis is not deemed to be necessary from a legal point 
of view in this case.  

(521)  The  Vietnamese  government  and  the  Vietnam  Leather  and  Footwear  association 
claimed that the continuation of measures lessens the effect of aid programs granted by 
the EU. The imposition or prolongation of anti-dumping duties is a normal, technical 
consequence  of  the  fact  that  Vietnamese  exporters  were  found  to  be  engaged  in 
injurious  dumping  practices.  Any  political  consideration  such  as  the  one  brought 
forward  is  outside  of  the  legal  framework  and  thus  irrelevant.  Moreover,  there  is  no 
conflict between the EU granting development aid to Vietnam in various areas and the 
imposition  of  anti-dumping  duties  after  a  thorough  investigation  conducted  in 
accordance with international trade rules.  

EN 

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•   

M. DEFINITIVE ANTI-DUMPING MEASURES 

(522)  In the light of the foregoing, the anti-dumping measures on leather footwear should be 
maintained. Nevertheless, and without ignoring that continuation of injurious dumping 
has been established and that Community interest calls for the imposition of measures, 
the  present  proceeding  is  characterised  by  particular  circumstances  as  referred  to  in 
recitals (324) to (326) above, which should also be adequately reflected in the duration 
of  the  antidumping  measures.  The  investigation  showed  that  there  is  a  likelihood  of 
continuation of injury for the short/medium term, until the process of adjustment of the 
Community  industry  has  been  completed.  The  duration  of  the  measures  should 
therefore be limited to 15 months. 

(523)  In  accordance  with  article  11.2  of  the  Basic  Regulation,  the  extension  of  measures 
following an expiry review would normally apply for 5 years, unless there are specific 
grounds  or  circumstances  which  call  for  a  shorter  period.  In  the  current  case  the 
investigation  demonstrated  that  Community  industry  was  undergoing  significant 
changes  in  the  period  considered.  In  particular  it  was  found  that  one  part  of  the 
industry  was  adapting  its  business  model  with  increasing  profits  which  neared  the 
target profit. 

This group was also found to be significantly expanding both in terms of turnover and 
volume so as to gradually absorb a significant part of the other group of industry that 
had not undergone a significant change in its business model 

(524)  Based  on  these  developments  found,  it  is  considered  that  at  this  point  in  time, 
regarding  the  period  after  the  one  stipulated  in  recital(522),  the  likelihood  of 
continuation  of  injury  can  no  longer  be  ascertained.  Therefore,  it  is  considered 
inappropriate to propose a longer duration of the measures than that period. 

(525)  It is recalled that the measures subject to the current review were extended by Council 
Regulation  (EC)  No  388/200811  to  imports  of  the  same  product,  consigned  from  the 
Macao  SAR,  whether  declared  as  originating  in  the  Macao  SAR  or  not.  No  new 
element  was  brought  forward  in  this  respect  in  the  framework  of  this  review.  The 
definitive anti-dumping duty of 16.5 % and applicable to imports originating in China 
should  therefore  be  extended  to  imports  of  the  same  product  consigned  from  the 
Macao SAR, whether declared as originating in the Macao SAR or not.  

N. FINAL PROVISIONS 

(526)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which  it  was  intended  to  recommend  the  imposition  of  duties  on  the  PRC  and  on 
Vietnam.  In  accordance  with  the  provisions  of  the  basic  Regulation,  parties  were 
granted a period in which they could make representation subsequent to the disclosure. 
The  oral  and  written  comments  submitted  by  the  parties  were  considered  and,  when 
appropriate, the definitive findings have been modified accordingly.  

11 

OJ L 117, 1.5.2008, p. 1. 

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It follows from the above that the anti-dumping duties should be maintained for 15 months, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  footwear  with 
uppers  of  leather  or  composition  leather,  excluding  sports  footwear,  footwear 
involving special technology, slippers and other indoor footwear and footwear with a 
protective  toecap,  originating  in  the  People's  Republic  of  China  and  Vietnam  and 
falling within CN codes: 6403 20 00, ex 6403 51 05, ex 6403 51 11, ex 6403 51 15, 
ex 6403 51 19, ex 6403 51 91, ex 6403 51 95, ex 6403 51 99, ex 6403 59 05, ex 6403 
59 11, ex 6403 59 31, ex 6403 59 35, ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, 
ex 6403 59 99, ex 6403 91 05, ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 
91 18, ex 6403 91 91, ex 6403 91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 05, 
ex 6403 99 11, ex 6403 99 31, ex 6403 99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 
99 91, ex 6403 99 93, ex 6403 99 96, ex 6403 99 98 et ex 6405 10 0012. 

The TARIC codes are listed in the Annex to this Regulation. 

2. 

For the purpose of this Regulation, the following definitions shall apply: 

‘sports  footwear’  shall  mean  footwear  within  the  meaning  of  subheading  note  1  to 
Chapter 64 of Annex I to Commission Regulation (EC) No 1031/200813; 

‘footwear involving special technology’ shall mean footwear having a CIF price per 
pair of not less than EUR 7,5, for use in sporting activities, with a single- or multi-
layer  moulded  sole,  not  injected,  manufactured  from  synthetic  materials  specially 
designed  to  absorb  the  impact  of  vertical  or  lateral  movements  and  with  technical 
features  such  as  hermetic  pads  containing  gas  or  fluid,  mechanical  components 
which  absorb  or  neutralise  impact,  or  materials  such  as  low-density  polymers  and 
falling within CN codes ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 
18, ex 6403 91 91, ex 6403 91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 91, ex 
6403 99 93, ex 6403 99 96, ex 6403 99 98; 

‘footwear  with  a  protective  toecap’  shall  mean  footwear  incorporating  a  protective 
toecap with an impact resistance of at least 100 joules 14and falling within CN codes: 
ex6403 51 05, ex 6403 51 11, ex 6403 51 15, ex 6403 51 19, ex 6403 51 91, ex 6403 
51 95, ex 6403 51 99, ex 6403 59 05, ex 6403 59 11, ex 6403 59 31, ex 6403 59 35, 
ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, ex 6403 91 05, ex 6403 
91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 91, ex 6403 91 93, 
ex 6403 91 96, ex 6403 91 98, ex 6403 99 05, ex 6403 99 11, ex 6403 99 31, ex 6403 

12 

13 
14 

As defined in Commission Regulation (EC) No 1031/2008 of 19 September 2008 amending Annex I to 
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs  Tariff  (OJ  L  291,  31.10.2008,  p.  1).  The  product  coverage  is  determined  in  combining  the 
product  description  in  Article  1(1)  and  the  product  description  of  the  corresponding  CN  codes  taken 
together. 
OJ L 291, 31.10.2008. 
The impact resistance shall be measured according to European Norms EN345 or EN346. 

EN 

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99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 99 91, ex 6403 99 93, ex 6403 99 96, 
ex 6403 99 98 and ex 6405 10 00; 

‘slippers  and  other  indoor  footwear’  shall  mean  such  footwear  falling  within  CN 
code ex 6405 10 00. 

3. 

The rate of the anti-dumping duty applicable to the net, free-at-Community frontier 
price, before duty, for the products described in paragraph 1 and manufactured by the 
companies listed below shall be as follows: 

Country 

Company 

Anti-dumping 
duties 

TARIC 
additional code 

PRC 

Golden Step 

9.7% 

A775 

All other companies 

Vietnam 

All other companies 

16.5% 

10.0% 

A999 

- 

4. 

5. 

The definitive anti-dumping duty of 16.5 % and applicable to imports from 'all other 
companies'  in  the  People's  Republic  of  China  is  hereby  extended  to  imports  of  the 
products described in paragraph 1 consigned from the Macao SAR, whether declared 
as  originating  in  the  Macao  SAR  or  not.  The  TARIC  codes  for  imports  consigned 
from the Macao SAR are listed in the Annex to this Regulation. 

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

Article 2 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. It shall be in force for a period of 15 months. 

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

Done at Brussels, […] 

For the Council 
The President 
[…]

EN 

104 

   EN 

 
 
 
 
 
 
ANNEX 

TARIC codes for footwear with uppers of leather or composition leather as defined in Article 
1. 

CN code 

TARIC code for 

TARIC code for 

imports originating in China 
and Vietnam 

imports consigned from 
Macao 

6403 20 00 

20, 80 

6403 51 05 

15, 18, 95, 98 

6403 51 11 

6403 51 15 

6403 51 19 

6403 51 91 

6403 51 95 

6403 51 99 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

20 

15, 95 

91 

91 

91 

91 

91 

91 

6403 59 05 

15, 18, 95, 98 

15, 95 

6403 59 11 

6403 59 31 

6403 59 35 

6403 59 39 

6403 59 91 

6403 59 95 

6403 59 99 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

91 

91 

91 

91 

91 

91 

91 

6403 91 05 

15, 18, 95, 98 

15, 95 

6403 91 11 

6403 91 13 

6403 91 16 

95, 98 

95, 98 

95, 98 

95 

95 

95 

EN 

105 

   EN 

 
6403 91 18 

6403 91 91 

6403 91 93 

6403 91 96 

6403 91 98 

95, 98 

95, 98 

95, 98 

95, 98 

95, 98 

95 

95 

95 

95 

95 

6403 99 05 

15, 18, 95, 98 

15, 95 

6403 99 11 

6403 99 31 

6403 99 33 

6403 99 36 

6403 99 38 

6403 99 91 

91, 99 

91, 99 

91, 99 

91, 99 

91, 99 

95, 98 

6403 99 93 

25, 28, 95, 98 

6403 99 96 

25, 28, 95, 98 

6403 99 98 

25, 28, 95, 98 

6405 10 00 

81, 89 

91 

91 

91 

91 

91 

95 

25, 95 

25, 95 

25, 95 

81 

EN 

106 

   EN