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Asian link costs manufacturer

A CUSTOMS Service “dumping” decision has set new ground in the way dumping cases are dealt with in Australia.

Bassendean shelf storage manufacturer Summit Storage Products recently won a 2.5-year anti-dumping battle against another Australian shelf storage manufacturer. The other party used China and other parts of Asia as its manufacturing base but sold predominantly back into the Australian market at prices 40 per cent lower than what Summit products were selling for.

The anti-dumping case was unusual for a number of reasons. Summit, which has an annual turnover of $15 million and employs 50 people, is the smallest company to have won an anti-dumping case. But even more unusual was the method in which Customs came to its conclusions.

Customs normally makes decisions by comparing what a manufacturer sells the product for domestically compared with its overseas product. However, in this situation, Customs officials could not compare prices in the country of manufacture to the price the products were sold in Australia. This was because the firm in question, Geelong-based Amaz-on Storage Systems, struck an arrangement with China which precluded it from selling into China.

As a result, Customs was forced to apply a formula to estimate what prices Amazon would have offered the goods for in China, based on production costs.

But the case has even wider implications. Amazon was using Australian raw materials sourc-ed at prices Summit claims were significantly lower than those normally available to Australian manufacturers. So Australian providers of the raw materials appeared to be dumping their product overseas where they were manufactured and dumped back onto the Australian

market.

Customs appears powerless to investigate whether the Australian raw materials were dumped. It can only investigate whether an overseas manufac-turer is dumping in Australia.

Summit managing director Michael Minshall said Aust-ralian suppliers were terrific when they became aware of what Amazon was doing.

“BHP was fantastic. When they became aware that some of their steel was coming back in the Chinese shelving they offered us special pricing to help us compete,” he said.

“Wesfi also did their best to supply Medium Density Fibre Board to use at prices similar to those available in China.”

University of WA internat-ional economics senior lecturer Moonjoong Tcha said it was unusual for Customs to use costs of manufacture as a means of testing for dumping because cost was so hard to determine. So normally domestic prices are used as a determinant.

But he said the underlying principle used by Customs was whether the product was sold overseas at a rate lower than cost.

“There’s more to business than just profit – people and loyalty may be old fashioned, but they still count,” Mr Minshall said.

“Call me patriotic or sentimental, but I’d rather continue to employ the Australian workers who helped build the business than take advantage of cheap labour in developing countries in the blinkered pursuit of maximising profits.”

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