91998E2277

WRITTEN QUESTION E-2277/98

by Robert Evans (PSE) to the Commission

(22 July 1998)

Subject: Swedish Match and unfair competition

Is the Commission aware that due to the complaint by Swedish Match being upheld last year and the consequent severe anti-dumping penalty surcharges being imposed on Japanese match suppliers, match companies, including the Imperial Match Company in my constituency, have had to adjust their prices upwards to maintain profit margins?

Is the Commission also aware that Swedish Match have at the same time managed to reduce their prices by 30 %, which other companies are finding impossible to compete with?

Would the Commission agree that this seems to give Swedish Match the sort of unfair competition in the match market that they were so keen to prevent?

Answer given by Mr Van Miert on behalf of the Commission

(14 September 1998)

1. The Council adopted on 15 October 1997 Regulation (EC) 2025/97 imposing definitive anti-dumping duties on imports of advertising matches originating in Japan(1). The investigation in this case had shown that Japanese exporters were selling their products on the Community market at dumped prices and were thereby causing injury to the Community producers of advertising matches.

Indeed, the very purpose of the imposition of dumping duties is that the prices of the dumped imported products are raised in order to arrive at a non-injurious price level, which price level has been established in the course of the investigation. Consequently, the duties should result in higher resale prices on the Community market.

2. The Commission is not aware of the price reduction by Swedish Match as referred to by the Honourable Member and since the adoption of the Regulation referred to above, has not received any complaint in this respect.

3. The so-called "unfair" commercial behaviour attributed to Swedish Match by the Honourable Member might be the subject of an investigation under the competition rules of the EC Treaty only if a firm in a dominant position was suspected of predatory pricing practices, according to case law of the Court of justice (judgement of 3 July 1991, AKZO Chemie v. Commission) that is to say, prices below average variable costs (that is to say, those which vary depending on the quantities produced) by means of which a dominant undertaking seeks to eliminate a competitor, or even prices higher than average variable costs but lower than average total costs if they were established within the framework of a plan having the aim of eliminating a competitor.

In the present case the Commission does not have sufficient information at its disposal to envisage opening a procedure.

(1) OJ L 284, 16.10.1997.