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EU imposes duties against subsidised PET imports

By Guy Montague-Jones , 30-Sep-2010

The EU has imposed new duties on subsidised imports of PET destined for the European soft drinks market from Iran, Pakistan and the United Arab Emirates (UAE).

The anti-subsidy measures mean that PET imports from Iran will face a duty of €139.7 a tonne and imports from Pakistan and the UAE €44.02 and €42.34 a tonne respectively. The size of the tariffs is in accordance with the magnitude of the subsidies – being particularly high in Iran.

Five year duties

Announced in the Official Journal of the European Union, the new duties are applicable for the next five years and are designed to protect PET producers in the EU from artificially low priced imports.

The Commission said: “It was precisely this undercutting, made possible due to the subsidies received, that depressed the prices of the Union industry, forcing EU producers to sell at a loss in order not to lose their clients.”

But for some interested parties, particularly PET convertors and soft drink manufacturers, the new duties are not welcome news.

The Commission said some parties argued that duties would squeeze the already narrow margins of convertors and erode their capacity to invest in the development of new, environmentally friendly packaging and even force some smaller companies out of the market.

But following its own investigations, which included a visit to a small convertor in Italy, the imposition of duties is unlikely to have a devastating impact on the convertors.

The executive arm of the EU said this is because of the rather moderate level of the duties themselves and the fact that any added costs would not be absorbed solely by convertors but shared by bottlers, retailers and consumers.

Anti-dumping measures

At the same time as it imposed the new duties on PET imports from Iran, Pakistan and the UAE, the Commission, in a separate ruling this week, ended anti-dumping measures imposed on imports from the same three countries.

Dumping is typically defined as the practice of exporting products at prices below cost of production or below domestic market prices.

The Commission had initiated measures to combat the practice in the export of certain PET products from Iran, Pakistan and the UAE in September 2009. But following an investigation the anti-dumping proceedings have been stopped.

It concluded that imports from Pakistan and the UAE were not sold at dumped prices and that imports from Iran were made at dumped prices and had some negative impact on the EU industry but were not of a magnitude sufficient to justify continued action.

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