EU to impose dumping tax on Taiwanese CD-Rs

The European Union will impose an anti-dumping tax on all Taiwanese CD-R (CD-recordable) makers, a European Commission official said Thursday.

The Commission, the executive body of the European Union (EU), conducted an investigation into the practices of Taiwanese companies after a complaint from European CD-R manufacturers. The Taiwanese were found to be selling discs below cost price, obstructing fair competition, the official said. The tax measure takes effect this week.

A general duty of 39.5 percent applies for all Taiwanese CD-R makers, except for 11 who were determined to have "less negatively" affected the European market and cooperated with the investigation. The 11 will pay reduced duties of between 18.8 percent and 29.9 percent. This includes Ritek Corp., the world's largest CD-R maker, which will pay 18.8 percent while its main competitor, CMC Magnetics Corp., will have to pay the 39.5 percent tax.

It is unclear if the tax will lead to a CD-R price increase in the 15 nation bloc. Fuji Magnetics Europe GmbH, one of the complainants, said the tax measure might have no affect because distributors stockpiled cheap Taiwanese discs.

"I suppose they (the Taiwanese manufacturers) can't absorb this kind of tariff. It depends on the stock situation on the European market. There are rumors about distributors stocking up on cheap CDs," said Takaaki Ueda, product manager optical discs at Fuji Magnetics Europe in Kleve, Germany.

Another manufacturer, PrimeDisc Technologies GmbH, in Wiesbaden, Germany, believes prices will go up.

"The anti-dumping measure will of course affect prices. Rumors are nothing but rumors. If the Taiwanese raise their prices, so will we," said Silke van der Velden, a PrimeDisc spokeswoman.

Taiwanese companies rapidly won market share on the European CD-R market between 1997 and 2000, the Commission found in its investigation. About 160 million discs were sold in the EU in 1997, only 10 million of those came from Taiwan. In 2000 over 2 billion CD-Rs were sold in the EU, with 1.2 billion units imported from Taiwan, the Commission said.

Meanwhile, the European Commission is looking into other complaints from European manufacturers against foreign competitors, including Taiwanese manufacturers of personal fax machines and floppy disks.

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