Commission Implementing Regulation (EU) 2015/787 of 19 May 2015 imposing a provisional anti-dumping duty on imports of acesulfame potassium originating in the People's Republic of China as well as acesulfame potassium originating in the People's Republic of China contained in certain preparations and/or mixtures

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (1), and in particular Article 7(4) thereof,

After consulting the Member States,

Whereas:

(1) On 4 September 2014, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of acesulfame potassium originating in the People's Republic of China (‘the country concerned’ or ‘the PRC’) as well as acesulfame potassium originating in the People's Republic of China contained in certain preparations and/or mixtures. The Commission initiated the investigation on the basis of Article 5 of Council Regulation (EC) No 1225/2009 (‘the basic Regulation’) and published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 22 July 2014 by Nutrinova Nutrition Specialties & Food Ingredients GmbH (‘the complainant’), which is the sole producer of acesulfame potassium (or ‘Ace-K’) in the Union. The complainant thus represents the total Union production of Ace-K. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, the known exporting producers and the Chinese authorities, known importers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(4) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(5) In the Notice of Initiation, the Commission informed interested parties that based on the information in the complaint, the product concerned is only known to be produced in the Union and the PRC. Interested parties were given the opportunity to comment on this. No comments were submitted.

(6) Nevertheless, the Commission contacted all nine third countries, for which Eurostat statistics showed exports into the Union of products falling within the same CN codes as the product concerned. The Commission asked for their assistance in identifying Ace-K producers and/or producers' associations. None of the third countries contacted could identify producers of Ace-K. Therefore, no production other than in the Union and in the country concerned was identified.

(7) In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

(8) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(9) In view of the low number of replies, the Commission decided that sampling was not necessary.

(10) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the mission of the PRC to the Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(11) Four exporting producers in the country concerned provided the requested information and agreed to be included in the sample. One of these exporting producers did not have sales to the Union during the investigation period. Therefore, it could not be investigated and as a result, the number of cooperating companies was three. They accounted for all of the imports to the Union of the product concerned during the investigation period. In view of the low number of parties involved, the Commission decided that sampling was not necessary.

(12) For the purposes of Article 2(7)(b) of the basic Regulation, the Commission sent MET claim forms to the three cooperating exporting producers in the country concerned. None of the three cooperating exporting producers submitted a MET claim.

(13) The Commission sent questionnaires to the Union producer, the three cooperating exporting producers in the country concerned, and all unrelated importers and users which expressed an interest in the investigation.

(14) Questionnaire replies were received from the Union producer, the three cooperating exporting producers in the country concerned, three unrelated importers and one user.

(16) The investigation of dumping and injury covered the period from 1 July 2013 to 30 June 2014 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from January 2011 to the end of the investigation period (‘the period considered’).

(17) The product concerned is acesulfame potassium (potassium salt of 6-methyl-1,2,3-oxathiazin-4(3H)-one 2,2-dioxide; CAS RN 55589-62-3) originating in the PRC as well as acesulfame potassium originating in the PRC contained in preparations and/or mixtures comprising also other sweeteners and/or water (‘the product under investigation’) currently falling within CN code(s) ex 2106 90 92 , ex 2106 90 98 , ex 2934 99 90 (TARIC code 2934 99 90 21), ex 3824 90 92 , ex 3824 90 93 and ex 3824 90 96 (‘the product concerned’). Acesulfame potassium is also commonly referred to as Acesulfame K or Ace-K.

(18) Ace-K is used as a synthetic sweetener in a wide range of applications, for example in food, beverage, and pharmaceutical products.

(19) Ace-K produced and sold in the Union by the Union industry was found to have the same basic physical and chemical characteristics as well as the same basic uses as Ace-K produced in the country concerned and sold for export to the Union. They are therefore considered to be alike within the meaning of Article 1(4) of the basic Regulation.

(20) Pursuant to Article 2(7)(b) of that Regulation the Commission determines normal value in accordance with Article 2(1) to (6) of the basic Regulation for the exporting producers in the PRC which comply with the criteria in Article 2(7)(c) of the basic Regulation and could therefore be granted MET.

(21) However, none of the cooperating exporting producers applied for MET as mentioned also in recital 12.

(22) In accordance with Article 2(7)(a) of the basic Regulation, normal value had to be determined on the basis of the prices in an appropriate market economy third country (the ‘analogue country’), or the price from such a third country to other countries, including the Union, or, where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Union for the like product, duly adjusted if necessary to include a reasonable profit margin.

(23) In the absence of a third analogue country, as explained in recital 6, normal value was based on the prices actually paid or payable in the Union for the like product. The sales by the Union producer of those product types matching with those sold in the Union market by the Chinese cooperating producers during the investigation period were identified. The sales of the Union producer to independent customers were found representative when expressed as a proportion of the total volume of exports of the product concerned as well as per product type. The sales of these product types by the Union producer were profitable. Their average Union sales price served as the normal value.

(24) The cooperating exporting producers exported to the Union directly to independent customers. Therefore, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(25) The Commission compared the normal value and the export price of the cooperating exporting producers on an ex-works basis.

(26) Where justified in order to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation.

(27) In particular, the Commission made an adjustment for differences in level of trade as it was established that the sole Union producer sold mainly to users while the Chinese producers sold mainly to traders. Secondly, based on several submissions an adjustment was made for the quality difference and the market perception of that difference between the Chinese Ace-K and the Union producer's Ace-K. In addition, the normal value was adjusted for certain exceptional research and development (R & D) as well as marketing expenses incurred by the Union producer during the investigation period. These expenses are discussed in further detail in recital 67.

(28) For each of the cooperating exporting producers, the Commission compared the weighted average export price per product type with the weighted average normal value, in accordance with Article 2(11) and (12) of the basic Regulation.

(30) For all other exporting producers in the country concerned, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total export volume — as reported in Eurostat import statistics — from the country concerned to the Union.

(31) The level of cooperation in this case is high since the exports of the cooperating exporting producers to the Union constituted the total exports to the Union during the investigation period. On this basis, the Commission decided to base the residual dumping margin at the level of the cooperating company with the highest dumping margin.

(33) The analysis concerns only one company. Thus, for reasons of confidentiality most indicators are given in indexed form or ranges.

(34) The like product was manufactured by one producer in the Union during the investigation period, which constitutes the Union industry within the meaning of Article 4(1) of the basic Regulation.

(35) The Commission established the Union consumption on the basis of the data provided by the Union industry, Chinese export statistics and the data of the Chinese exporting producers. Eurostat data was not suitable for this purpose because the product concerned is imported under several CN codes together with many other products. In the absence of Ace-K production in any third country, all imports into the Union were from the PRC.

(37) The consumption of Ace-K in the Union has increased by around 4 % over the period considered, reportedly due to a rise in the demand of sugar-free products in the Union. In the last year of the period considered there was a decrease in consumption due to increased competition caused by other (new) sweeteners. However, this decrease seems to be of a temporary nature and there is no clear indication on the file that the demand for Ace-K will further decrease in the coming years.

(38) The Commission established the volume of Chinese imports on the basis of the Chinese export statistics cross-checked with the data provided by the three exporting producers from the PRC accounting for the total volume of exports of the product concerned during the investigation period.

(40) The level of imports from the PRC has increased by 14 % over the period considered. During the same period the market share of Chinese imports also increased, by 10 % to reach 65 % — 80 % during the investigation period.

(42) The average prices of imports from the PRC have consistently decreased during the period considered by 30 %.

(44) The weighted average Union industry's price was compared with the corresponding weighted average prices per product type of the imports from the cooperating exporting producers for transactions at the same level of trade, after deduction of rebates and discounts as well as after the adjustments to the Union industry price for quality difference and the market perception thereof and R & D and marketing expenses for the same reasons as those mentioned in recital 27 above. The result of the comparison was expressed as a percentage of the Union producers' turnover during the investigation period. The Commission found a weighted average undercutting margin of between 18 % and 45 % by the imports from the PRC on the Union market.

(45) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered. For the injury determination, the Commission did not make a distinction between macroeconomic and microeconomic injury indicators since the sole Union producer constituted the Union industry within the meaning of Article 4(1) of the basic Regulation. The Commission evaluated the economic indicators on the basis of data related to the sole Union producer. The data were found to be representative of the economic situation of the Union industry.

(46) The economic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping, average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital. They are analysed as follows.

(48) The volume of production of the Union industry consistently decreased, by 31 %. In fact, during the period considered the Union producer increasingly performed shut-downs of the production facilities in order to cut costs. During the investigation period, the factory was, for that reason, shut down for a total of four months.

(49) The production capacity of the Union industry remained unchanged throughout the period considered, as many costs are fixed, independently of capacity. Consequently, the capacity utilisation decreased in line with the volume of production.

(51) Over the period considered the volume of sales of the Union producer dropped overall by 13 %, even though consumption increased during that period. This adverse trend includes a period of slight volume recovery from 2013 to the investigation period which could only be achieved through contracts with sales prices which further undermined the viability of the Union industry.

(52) The market share of the Union industry also fell, by 16 %, over the period considered, both due to customers which shifted supplier and to customers with dual supply which increased the share of purchases from the PRC.

(53) It is clear that Union industry's growth was negative bearing in mind the abovementioned fall in market share and the increase in consumption mentioned at recital 37.

(55) From 2011 to the end of the investigation period, the Union industry reduced its personnel by almost one fifth to cope with the decrease in production and in line with the temporary shut downs. Productivity increased slightly by 6 % over the same period as a consequence of the reduction in the number of employees.

(57) The Union industry average labour costs per employee increased by 15 % over the period considered because severance payments became due as a result of the reduction in personnel (see recital 54). Also, reportedly new wage rates were applicable within the chemical sector.

(58) All dumping margins were significant (see recital 29 above). The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the PRC.

(59) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

(61) The Union industry's average selling price of the like product fell by 12 % in the period considered, partly following the strongly negative trend of the average import prices from the PRC (see recital 42).

(62) The Union industry average cost of production increased by 19 %. This was mainly caused by the increased impact of fixed costs on a reducing volume of production and sales and by an increase in the price of raw material.

(64) Although closing stocks fell in the period considered due to temporary shut downs of production facilities to cut costs (see recital 48), as a percentage of production stocks they increased.

(66) The Commission established the profitability of the Union industry by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. In calculating profitability, the Commission deducted from the reported costs all R & D and marketing costs which it considered to be of an exceptional nature, as also mentioned in recital 27 above. Without this deduction, the Union industry would have reached a loss-making situation in the investigation period. In line with the fall in profitability, net cash flow, investments and return on investments also decreased.

(67) The Union industry claimed that the deducted R & D and marketing costs were normal, ongoing costs related to the product concerned. However, the investigation concluded that these costs related to a new product, albeit a product falling within the product scope of this investigation. These exceptional and high costs would not occur in a normal or representative year for the Union industry. In addition, these costs concern the R & D and marketing of a product that was not sold in significant volumes on the Union market during the period considered.

(68) Even with the above mentioned exclusion of costs, the Union producer's profitability decreased sharply and consistently over the period considered. The Commission considered the level of profitability in the investigation period and the trend of profitability to be injurious because of the clear and substantial fall described above.

(69) The steep fall in profitability was mainly due to the allocation of steadily increasing fixed costs per tonne as compared to the reducing volume of production and sale. In addition, there was a clear fall in average prices, which led to the inability of the Union industry to sustain profit levels and as a result the profitability dropped dramatically. As shown in Table 10 above, the other performance indicators followed a similar trend to return on turnover.

(70) The net cash flow is the ability of the Union producers to self-finance their activities. Expressed as an index, the trend in net cash flow developed negatively over the period considered, decreasing by 22 % as a consequence of the profitability decrease.