Shimano gears up for fight over dumping duties

Date: 26/07/01

By Laurence Frost

A LOOMING stand-off between the European Commission and member governments is promising to throw light on one of the least-understood areas of EU policy: anti-dumping. The case concerns bicycle gears made by Japanese firm Shimano, a complaint by US rival SRAM and the protests of a German company called Puky - and others from its peer group. October will see the end of a 15-month investigation into a complaint by the German arm of US producer SRAM that Shimano was selling its gear system in EU markets at prices lower than those in its home market - also known as 'dumping'.

The Commission was caught seriously off balance in March, when it was forced to back down from imposing temporary 15% duties on Shimano imports. The measure won the backing of just two countries, Belgium and Ireland. The Commission will be hoping its self-restraint has won over some of the undecided countries when it outlines the case for 'definitive' duties to national officials today (July 26). It is facing an uphill challenge.

Unusually, the country where the complainant is based, Germany, is not pushing for sanctions. Its silence may be partially explained by alarm cries from its downstream industry, which is already losing out to Turkey, Poland and the Czech Republic. "We would have to stop making children's bikes if the duties were imposed," said Rolf Kukenberger, general manager of Puky - one of several producers and retailers who have opposed duties through their respective associations, ZIV and ZEG. "We order gear hubs from SRAM and from

Shimano and we always have to pay more for Shimano," Kukenberger added. "That's why we don't understand their [the Commission's] position." Shimano admits it was technically dumping when its German charges dipped below its Yen price list, as the euro weakened in 1999 and early 2000. Two subsequent price rises have brought its euro prices back up to par - but only after Commission officials descended on the firm's Osaka headquarters, removing hundreds of boxes of documents. The Shimano case is a barometer of changing attitudes to anti-dumping policy, even by traditional protectionists such as France. The demise of British gears producer Sturmey Archer also means punitive duties could leave SRAM with complete market dominance. "In the first year we would lose 50% of our business," said Satoshi Yuasa, Shimano's managing director for Europe. "Nobody would buy from Shimano - even 10% is a lot in the bicycle industry."