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Commission Implementing Regulation (EU) 2025/1723 of 6 August 2025 imposing a provisional anti-dumping duty on imports of certain prepared or preserved sweetcorn in kernels, originating in the People’s Republic of China

Type Implementing Regulation
Publication 2025-08-07
State In force
Text As published
Department European Commission, TRADE
Source EUR-Lex
articles 4

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

Reform history JSON API
  • (146) In essence, despite the steps that have been taken to liberalize the market, the corporate credit system in China is affected by significant distortions resulting from the continuing pervasive role of the state in the capital markets. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.
  • (147) No evidence was submitted in the present investigation demonstrating that the sector of the product concerned is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.
3.2.1.8.   Systemic nature of the distortions described
  • (148) The Commission noted that the distortions described in the Report are characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above as well as in Part I of the Report apply throughout the country and across the sectors of the economy. The same holds true for the description of the factors of production as set out above and in Part II of the Report.
  • (149) The Commission recalled that in order to produce the product concerned, certain inputs are needed. When the producers of the product concerned purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors. These distortions were described in detail above, in particular in section 3.2.1.1. The Commission pointed out that the regulatory setup underpinning those distortions is generally applicable, sweetcorn producers being subject to those rules as any other economic operator in China. The distortions have therefore a direct bearing on the cost structure of the product concerned.
  • (150) As a consequence, not only the domestic sales prices of the product concerned are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report.
  • (151) Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout China. This means, for instance, that an input that in itself was produced in China by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth.
  • (152) No evidence or argument to the contrary has been adduced by the GOC or the exporting producers in the present investigation.
3.2.2.   Representative country

General remarks

  • (153) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:
  • — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank 96;
  • — Production of the product under investigation in that country;
  • — Existence of relevant readily available data in the representative country;
  • — Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection.
  • (154) As explained in recitals 53 and 54 above, the Commission issued two notes for the file on the sources for the determination of the normal value. These notes described the facts and evidence underlying the relevant criteria, and also addressed the comments received by the parties on these elements and on the relevant sources. In the Second Note, the Commission informed interested parties of its intention to consider Malaysia as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

A level of economic development similar to the PRC

  • (155) In the First Note, the Commission identified Colombia, Malaysia, Mexico, Serbia, Thailand and Türkiye as countries with a similar level of economic development as the PRC according to the World Bank, i.e. they are all classified by the World Bank as ‘upper-middle income’ countries on a gross national income basis where production of the product under investigation was known to take place.
  • (156) AETMD argued that for Colombia, Malaysia, Serbia, Thailand or Türkiye the Commission’s First Note stated that not all data relating to factors of production and sale were available. They also stated that prices and costs of factors of production and sale were distorted. They therefore supported the use of Mexico as a representative country.
  • (157) CFNA argued that Malaysia was a suitable representative country because data was available for a company in the same general category as the product concerned, i.e. the production and sale of packaged food products including canned food and drinks. CFNA also argued that Thailand, Colombia and Türkiye should be excluded in the suggested representative countries because of high quantities of imports from China of fresh sweetcorn. In addition, CFNA stated that Mexico should be excluded as it did not import large quantities of cans.

Existence of relevant readily available data in the representative country

  • (158) In the First Note the Commission indicated that for the countries identified as countries where product under investigation is being produced, i.e. Colombia, Malaysia, Mexico, Serbia, Thailand and Türkiye, the availability of data needed to be further verified in particular with regard to the readily available financial data from producers of the product under investigation.
  • (159) For Colombia, Serbia and Türkiye no readily available financial data was identified.
  • (160) For Malaysia it was noted that one company (Fraser and Neave Holdings BHD) had readily available financial data covering the whole investigation period.
  • (161) For Mexico it was noted that one company (Grupo Herdez) had readily available financial data for 2023.
  • (162) For Thailand it was noted that two companies (Chin Huay PCL and Sunsweet PCL) had readily available financial data for 2023.
  • (163) Comments on the First Note were received from CFNA and AETMD.
  • (164) CFNA argued that Malaysia was a suitable representative country because data was available for a company in the same general category as the product concerned, i.e. the production and sale of packaged food products including canned food and drinks.
  • (165) In its Second Note the Commission agreed with interested parties that Colombia, Serbia and Türkiye should not be further considered as a representative country, at the provisional stage, due to the lack of readily available financial data.
  • (166) In light of the above considerations, the Commission informed the interested parties with the Second Note that it intends to use Malaysia as an appropriate representative country and the company Fraser and Neave Holdings BHD, in accordance with Article 2(6a)(a), first indent of the basic Regulation in order to source undistorted prices or benchmarks for the calculation of normal value.
  • (167) Interested parties were invited to comment on the appropriateness of Malaysia as a representative country and of Fraser and Neave Holdings BHD as a producer in the representative country.
  • (168) Tongfa Group argued against using the proposed company for SG&A and profit data (Fraser and Neave Holdings BHD) because it does not produce the product under investigation. In its place Tongfa Group proposed a sweetcorn producer in Thailand. The Commission noted that this was contrary to their views on the First Note, at which time Tongfa Group proposed Fraser and Neave Holdings BHD as a suitable company in the representative country.
  • (169) The Commission could not accept this claim as Thailand has already been rejected as a suitable representative country. In addition, Fraser and Neave Holdings BHD, manufactures products in the same general category as the product under investigation, i.e. food and drink products including canned products.
  • (170) For Malaysia it was noted that over 70 % of imports of cans and under 15 % of imports of fresh sweet corn were from the PRC.
  • (171) For Mexico it was noted that there were no imports of fresh sweet corn recorded in GTA. In respect of cans less than 20 % were from the PRC.
  • (172) For Thailand it was noted that almost all imports of fresh sweet corn and over half the imports of cans were from the PRC.
  • (173) AETMD argued that for Malaysia and Thailand the Commission’s First Note stated that not all data relating to factors of production and sale were available. They also stated that prices and costs of factors of production and sale were distorted due to the influence of Chinese imports. They therefore supported the use of Mexico as a representative country.
  • (174) CFNA argued that Thailand, Colombia and Türkiye should be excluded in the suggested representative countries because of high quantities of imports from China of fresh sweetcorn. In addition, CFNA stated that Mexico should be excluded as it did not import large quantities of cans.
  • (175) In its Second Note the Commission noted that Thailand should not be further considered as a representative country, at the provisional stage, due to the large quantities of imports from China of fresh sweetcorn and cans which make up around 75 % of the cost of manufacturing.
  • (176) The Commission also stated that Mexico should not be further considered as a representative country because of a lack of imports into Mexico of the main raw material (fresh sweetcorn).
  • (177) The Commission also commented in the Second Note that there was no evidence of that the prices of imports into Malaysia of cans from China had affected the prices of other imports. Furthermore, less than 15 % of the imports of fresh sweet corn were from China.
  • (178) In light of the above considerations, the Commission informed the interested parties with the Second Note that it intends to use Malaysia as an appropriate representative country in accordance with Article 2(6a)(a), first ident of the basic Regulation in order to source undistorted prices or benchmarks for the calculation of normal value.
  • (179) Interested parties were invited to comment on the appropriateness of Malaysia as a representative country.
  • (180) Following the issue of the Second Note AETMD provided data of exports of fresh sweetcorn from USA to Mexico. It argued that in the light of this data the Commission should use Mexico as a representative country rather than Malaysia. In its rebuttal CFNA pointed out that this information was export data meaning that additional costs were needed to bring the prices to a CIF Mexico duty paid level. CFNA also challenged the value of this data as it pointed out that the quantities involved were limited and therefore the prices were not representative.
  • (181) The Commission noted that the price of these exports was so high that it was not clear if a distorting factor affected these prices or even if the product exported was comparable to the product under investigation.
  • (182) CFNA pointed out that there was a discrepancy in the Second Note in relation to the source of cans to be used because the Note suggests using Mexico as a source whereas Malaysia was the representative country. CFNA presumed that an error had been made. This comment was accepted as the reference to Mexico was indeed an error.
  • (183) CFNA made a further point regarding the use of Malaysia as a source for cans as it suggested using the average price of codes 7310 21 91 and 7310 21 99 . However, this comment was rejected as code 7310 21 91 concerns cans of tinplate and code 7310 21 99 relates to can other than tinplate. Therefore, the Commission decided to use solely code 7310 21 91 as shown in Table 1 above.
  • (184) CFNA and Tongfa Group also claimed that Mexico’s import quantity of cans was too small in absolute terms and therefore its import price was not representative. However, these parties did not specify to which code its comment referred. The Commission noted that there were no imports of cans into Mexico under code 7310 21 91 .
  • (185) Following the issue of the Second Note and a review of the comments made by interested parties the Commission concluded that Malaysia remained the most appropriate source to establish undistorted costs. This was largely due to the availability of undistorted benchmarks for the main FOPs (fresh sweetcorn and cans). In addition, there remained a lack of suitable undistorted and representative data available for fresh sweetcorn and cans into Mexico.

Level of social and environmental protection

  • (186) Having established that Malaysia was the only available appropriate representative country, based on all of the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.
3.2.2.1.   Conclusion
  • (187) In view of the above analysis, Malaysia met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country.
3.2.3.   Sources used to establish undistorted costs
  • (188) In the First Note, the Commission listed the factors of production such as materials, energy and labour used in the production of the product under investigation by the exporting producers and invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production mentioned in that note.
  • (189) Subsequently, in the Second Note, the Commission stated that, in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use GTA to establish the undistorted cost of some of the factors of production, notably the raw materials. In addition, the Commission stated that it would use the Malaysian national statistics for establishing undistorted costs of labour 97 98 99 and energy 100 101.
  • (190) In the Second Note, the Commission also informed the interested parties that due to the large number of factors of production of the sampled exporting producers that provided complete information and the negligible weight of some of the raw materials in the total cost of production, these negligible items were grouped under ‘consumables’. Further, the Commission informed that it will calculate the percentage of the consumables on the total cost of raw materials and apply this percentage to the recalculated cost of raw materials when using the established undistorted benchmarks in the appropriate representative country.
3.2.3.1.   Factors of production
  • (191) Considering all the information submitted by the interested parties and collected during the verification visits, the following factors of production and their sources have been identified in order to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of product under investigation

Factor of Production Commodity Code Undistorted value (CNY) Undistorted value (CNY) Unit of measurement
Raw materials Raw materials Raw materials Raw materials Raw materials
Fresh Sweet Corn 0709 99 10 0709 99 10 1,68 Kg
Cans 7310 21 91 7310 21 91 28,13 Kg
Consumables Consumables Consumables Consumables Consumables
Labour Labour Labour Labour Labour
Labour N/A N/A 39 Hours worked
Energy Energy Energy Energy Energy
Natural gas N/A N/A 1,79 m3
Electricity N/A N/A 0,548 kWh
Biomass 4401 39 4401 39 3,65 Kg
  • (192) The Commission included a value for manufacturing overhead costs in order to cover costs not included in the factors of production referred to above. To establish this amount, the Commission used the costs incurred by the sampled exporting producers as a percentage of the direct costs of manufacturing. The methodology is duly explained in recital 202.

Raw materials

  • (193) In order to establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA to which import duties and transport costs were added. An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding the PRC and countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the Council 102. The Commission decided to exclude imports from the PRC into the representative country as it concluded in section 3.2.1 that it is not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices.
  • (194) For a number of factors of production the actual costs incurred by the cooperating exporting producers represented a negligible share of total raw material costs in the investigation period. As the value used for these had no appreciable impact on the dumping margin calculations, regardless of the source used, the Commission decided to include those costs into consumables as explained in recital 190.
  • (195) Duties applicable to the importation of the factors of production into Malaysia were added where applicable.
  • (196) The Commission added a percentage to the imported prices to cover transportation of the factors or production from the border to the cooperating exporting producer in order to obtain the undistorted transport cost. This addition was equivalent to the actual percentage of delivery costs for raw materials of each sampled exporting producer. The Commission considered that, in the context of this investigation, this methodology could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory.

Labour

  • (197) The Malaysian Department of Statistics 103 publishes detailed information on wages in different economic sectors in Malaysia. Its reports show monthly salaries and wages in the manufacturing sector. The average monthly value in the investigation period has been duly adjusted for other contributions by adding the Employees Provident Fund (EPF) contributions, (13 %), the Social Security Organization (SOCSO) contributions (1,75 %), the Employment Insurance System (EIS) contributions (0,2 %) and the Human Resource Development Fund (HRDF) contributions (1 %) 104 105.

Electricity

  • (198) The Commission has used the electricity price statistics published by Tenaga Nasional Berhad 106. The Commission used the data of the industrial electricity prices in the consumption band ‘Tariff E2 - Medium Voltage Peak/Off-Peak Industrial Tariff’ for peak usage in kWh, 0,355 RM per kWh (0,548 CNY per kWh).

Natural gas

  • (199) The price of natural gas for industrial users in Malaysia is published by the Malaysian Energy Commission (Suruhanjaya Tenaga) 107. The Commission used the most recent available data and indexed it for inflation to reflect the price of the investigation period
  • (200) The Commission therefore used the data of the average industrial gas prices covering the investigation period, namely 1,79 CNY/m3.

Manufacturing overhead costs, SG&A and profits

  • (201) According to Article 2(6a)(a) of the basic Regulation, ‘the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits’. In addition, a value for manufacturing overhead costs needs to be established to cover costs not included in the factors of production referred to above.
  • (202) The manufacturing overheads incurred by the cooperating exporting producers were expressed as a share of the costs of manufacturing actually incurred by the exporting producers. This percentage was applied to the undistorted costs of manufacturing.
  • (203) For establishing an undistorted and reasonable amount for SG&A and profit, the Commission relied on the financial data for Fraser and Neave Holdings BHD as extracted from its Annual Report 2024 (excluding transport) covering the investigation period.

Calculation

  • (204) On the basis of the above, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.
  • (205) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of the cooperating exporting producers. These consumption rates were verified during the verification. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country, as described in section 3.2.3.
  • (206) In respect of the Sunflower Group, a revised version of the consumption rates per product type was received during the verification visit.
  • (207) In respect of the Tongfa Group, the method used to apportion consumed hours for labour to the product under investigation was discussed during the verification visit. It was explained that Tongfa Group produced many canned products in the investigation period. The method used to apportion consumption rates for labour hours for the production under investigation as compared to other products was challenged at the verification visit by the Commission because the method used was only supported by data in spreadsheets which did not constitute a verifiable system as they could not be crossed-checked against other company records. Moreover, the case team inquired why Tongfa Group did not use, for labour, the same allocation key used for other factors of production (e.g. energy), being the share of the volume of the product under investigation in the volume of total company’s production. The Commission therefore issued a letter under Article 18 of the basic Regulation to inform Tongfa Group of its proposal to base the consumption of labour hours on the facts available.
  • (208) Tongfa Group replied by stating that it had cooperated with the investigation to the best of its ability in respect of the issue of labour and all aspects of the investigation. It wished to be considered as a fully cooperating party.
  • (209) Although the Commission still regards Tongfa as a cooperating party in this investigation, the Commission maintains that Article 18 should apply since Tongfa did not provide the necessary information in relation to the calculation of labour hours. Accordingly, labour hours should be calculated using the facts available. Therefore, at this stage, labour hours consumed were calculated using an apportionment ratio of production quantity of the product under investigation to total production quantities of all products.
  • (210) Once the undistorted manufacturing cost was established, the Commission applied the manufacturing overheads, SG&A, profit and depreciation as noted in recital 203. They were determined on the basis of the financial statements of Fraser and Neave Holdings BHD as explained in section 3.2.2.
  • (211) Then the Commission added manufacturing overheads and depreciation to the undistorted cost of manufacturing in order to arrive at the undistorted costs of production. As explained in recital 192, this accounted in total for around 6 % of the direct costs of manufacturing of each sampled company. The calculation of the overhead percentages used was disclosed to each sampled company.
  • (212) To the costs of production established as described in the previous recital, the Commission applied SG&A and profit of Fraser and Neave Holdings BHD. SG&A expressed as a percentage of the Costs of Goods Sold (‘COGS’) and applied to the undistorted costs of production, amounted to 17 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 19 %.
  • (213) On that basis, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

3.3.   Export price

  • (214) In respect of the Sunflower Group, the exporting producer exported to the Union either directly to independent customers in the Union or through unrelated traders outside the Union.
  • (215) In respect of the Tongfa Group, the producer (Zhangzhou Tongfa Foods Industry Co., Ltd - hereinafter ‘ZT’) first sold the product concerned to a related trader (Fujian Tongfa Foods Group Co., Ltd - hereinafter ‘FT’). FT then sold to the Union either directly to independent customers in the Union or through unrelated traders outside the Union.
  • (216) The export price of both groups 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.

3.4.   Comparison

  • (217) Article 2(10) of the basic Regulation requires the Commission to make a fair comparison between the normal value and the export price at the same level of trade and to make allowances for differences in factors which affect prices and price comparability. In the case at hand the Commission chose to compare the normal value and the export price of the sampled exporting producers at the ex-works level of trade. As further explained below, where appropriate, the normal value and the export price were adjusted in order to: (i) net them back to the ex-works level; and (ii) make allowances for differences in factors which were claimed, and demonstrated, to affect prices and price comparability.
3.4.1.   Adjustments made to the normal value
  • (218) As explained in recital 210, the normal value was established at the ex-works level of trade by using costs of production together with amounts for SG&A (excluding transport) and for profit, which were considered to be reasonable for that level of trade. Therefore, no adjustments were necessary to net the normal value back to the ex-works level.
3.4.2.   Adjustments made to the export price
  • (219) In order to net the export price back to the ex-works level of trade, adjustments were made on the account of inland freight, handling loading and ancillary expenses.
  • (220) Allowances were made for the following factors affecting prices and price comparability: credit costs, bank charges and packaging.
  • (221) In respect of the Tongfa Group, as all Union sales were made via a related trader in China (FT), an adjustment to the export price was made to cover the SG&A and profit of the related trader under Article 2(10)(i) of the basic Regulation. The source and level of these rates was disclosed to the party concerned.
  • (222) In respect of the Sunflower Group, the method used to calculate credit costs was discussed during the verification. The company used the interest rates of the China exchange trade system 108. The case team highlighted during the verification that these interest rates were not appropriate as they were not the interest rate charged by commercial banks for commercial loans. The case team therefore asked the company to review the level of the interest rate for the calculation of the credit costs. However, the Sunflower Group did not provide the necessary revised information in relation to the interest rates.
  • (223) The Commission therefore issued a letter under Article 18 of the basic Regulation to inform the Sunflower Group of its proposal to base the credit costs on the facts available.
  • (224) Sunflower Group replied by stating that they used the rates available to them at the time and that if the Commission used alternative rates these should reasonably reflect the situation surrounding international trade transactions.
  • (225) The Commission, therefore, maintained that in respect of the calculation of credit costs Article 18 should apply, meaning that the credit costs should be calculated using the facts available. Credit costs were thus calculated using rates of the Bank of China. Such rates more reasonably reflected the rates applicable for commercial loans.
  • (226) In respect of both sampled exporting producers’ exports to the Union were made on a FOB basis. Therefore, the methodology used to calculate CIF prices, by adding ocean freight and insurance, was discussed during the verification. It was found that both companies had underestimated significantly these ocean freight rates. The case team therefore asked the company to review the level of freight rates for the calculation of the CIF prices. However, the sampled exporting producers did not provide any revised necessary information on ocean freight rates, nor the estimated CIF prices.
  • (227) The Commission therefore issued a letter under Article 18 of the basic Regulation to inform both groups of its proposal to base the ocean freight rates on the facts available as the data supplied had been false or misleading and since, in any event, the company had failed to supply the necessary information within the time limit prescribed by the Commission.
  • (228) Sunflower Group replied by stating that they acquired the rates used from a customer and it covered a 15-day period in July 2024. Sunflower Group therefore disagreed that the information was false or misleading. However, the investigation showed that the freight rates in the investigation period fluctuated substantially and during the 15-day period in July 2024 of the ocean freight rates were very high. The Commission considered it inappropriate to use these ocean freight rates to the whole of the investigation period and found that it was misleading of the Sunflower Group to have submitted such information arguing that these rates should be applied to the whole IP.
  • (229) Tongfa Group replied to the Article 18 letter by stating that they had cooperated to the best of their ability and did not consider that the information they had supplied was false or misleading. However, the investigation showed that the data supplied was accurate for only around 70 % of sales to the Union by net weight. The Commission pointed out during the investigation that for the remaining 30 % of sales the approach taken did not take into account the date of the shipment and consequently, the approach taken for such sales was clearly inaccurate. Therefore, it was appropriate to recalculate the freight rates for 30 % of the Union sales.
  • (230) Sunflower Group proposed that the Commission used the actual ocean freight costs incurred by exporting producers in other anti-dumping investigations. However, this claim was rejected as the ocean freight rates used by the Commission related to the product concerned and therefore were more accurate.
  • (231) The Commission, therefore, maintained that in respect of the calculation of the CIF prices, Article 18 should apply, meaning that ocean freight rates should be calculated using the facts available. Such ocean freight rates were calculated using average monthly information of four customers of the sampled exporting producers. Such ocean freight rates were considered appropriate as they related to exports from China to the Union of the product concerned during the investigation period.
  • (232) The rates involved were disclosed to the sampled producers.

3.5.   Dumping margins

  • (233) For the sampled cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.
  • (234) On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:
Company Provisional dumping margin
Sunflower Group: — Sun Flower Food Industry (Xinfeng) Co., Ltd, Ganzhou City, China — Sunny Food Industry Co., Ltd, Ganzhou City, China 42,4  %
Zhangzhou Tongfa Foods Industry Co., Ltd, Zhangzhou, China 54,3  %
Other cooperating companies 48,1  %
All other imports originating in country concerned 54,3  %
  • (235) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled exporting producers, disregarding the margins of the exporting producers with zero and de minimis dumping margins. As explained in recitals 40 to 42 above, the Commission has applied Article 18 to a limited number of issues concerning the data supplied by each of the sampled exporting producers and for the most part revised the companies’ data rather than replace it with other data. The application of Article 18 did not have a major impact on the calculation of the normal value. For this reason, the Commission considered it appropriate to establish the dumping margin for other cooperating companies on the basis of the dumping margins established for the sampled exporting producers.
  • (236) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 48,1 %.
  • (237) For all other exporting producers in the PRC, 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 imports from the country concerned to the Union in the investigation period, that were established on the basis of Eurostat.
  • (238) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted over 90 % of the total imports during the investigation period. On this basis, the Commission decided to establish the dumping margin for non-cooperating exporting producers at the level of the cooperating sampled individually examined company with the highest dumping margin.

4. INJURY

4.1.   Unit of measurement

  • (239) Import statistics are reported in Eurostat (Comext) as the net weight, representing the weight related to the sweetcorn kernels and the liquid. Consequently, the net weight is used as the unit of measurement during this investigation.

4.2.   Definition of the Union industry and Union production

  • (240) The like product was manufactured by 11 producers and producer groups in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.
  • (241) The total Union production during the investigation period was established at around 259 400 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as direct information from the sampled Union producers and the Union producers supporting the complaint. As indicated in recital 30, the two sampled Union producers represented more than [29 - 38] % of the total Union production of the like product.

4.3.   Union consumption

  • (242) The Commission established the Union consumption on the basis of sales made by the Union industry on the Union market and Eurostat data for imports.
  • (243) Union consumption developed as follows:

Table 2

Union consumption (tonnes/net weight)
2021 2022 2023 Investigation period
Total Union consumption (tonnes/ net weight) 299 021 307 619 295 208 272 245
Index 100 103 99 91
Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext).
  • (244) The total Union consumption increased by 3 % between 2021 and 2022 from about 299 020 tonnes in 2021 to about 327 620 tonnes in 2022. Between 2022 and 2023, consumption decreased by 4 percentage points to about 295 208 tonnes. Until the end of the investigation period, consumption dropped further by 8 percentage points to 272 245 tonnes.

4.4.   Imports from the country concerned

4.4.1.   Volume and market share of the imports from the country concerned
  • (245) The Commission established the volume of imports on the basis of Eurostat (Comext) data. The market share of the imports was established on the basis of the available Eurostat data.
  • (246) Imports into the Union from the country concerned developed as follows:

Table 3

Import quantity (tonnes/net weight) and market share
2021 2022 2023 Investigation period
Quantity of imports from the country concerned (tonnes/net weight) 6 484 17 712 46 631 40 052
Index 100 273 719 618
Market share (%) 2 6 16 15
Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext). Source: Data from the Union industry and Eurostat (Comext).
  • (247) The volume of imports from China showed a strong increase over the period considered. While the imports increased between 2021 and 2022 by 173 % from about 6 500 tonnes to 17 710 tonnes, they surged between 2022 and 2023 by 446 percentage points to 46 631 tonnes. Until the end of the investigation period, the imports were slightly reduced to about 40 050 tonnes, remaining at a very substantial level.
  • (248) The market share of imports from China showed a similar development as the volume of imports with a sharp increase from 2 % in 2021 to 15 % in the investigation period.

4.5.   Prices of the imports from the country concerned and price undercutting

  • (249) The Commission established the prices of imports on the basis of EUR per tonne (net weight) reported in Eurostat statistics (Comext). Price undercutting of the imports was established on the basis of CIF prices for the sampled exporting producers and the verified questionnaire replies of the sampled Union producers.
  • (250) The weighted average price of imports into the Union from the country concerned developed as follows:

Table 4

Import prices (tonnes/ net weight)
2021 2022 2023 Investigation period
Average price from the country concerned 1 164 1 570 1 285 1 192
Index 100 135 110 102
Source: Eurostat (Comext). Source: Eurostat (Comext). Source: Eurostat (Comext). Source: Eurostat (Comext). Source: Eurostat (Comext).
  • (251) The average price of imports from the PRC showed an increase of 35 % between 2021 and 2022 from 1 164 EUR per tonne to 1 570 EUR per tonne. However, these prices fell by 25 percentage points in 2023. Prices in the investigation period were only 2 % higher than in 2021. Overall, import prices remained substantially lower compared to Union prices as reflected in Table 8.
  • (252) The Commission determined the price undercutting during the investigation period by comparing:
  • (1) the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level; and
  • (2) the corresponding weighted average prices per product type of the imports from the sampled cooperating exporting producers to the first independent customer on the Union market, established on a Cost, insurance, freight (CIF) basis, with appropriate adjustments for customs duties, conventional duty, and post-importation costs.
  • (253) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period. It showed a significant weighted average undercutting margin of between 7,2 % and 28,6 % by the imports from the country concerned on the Union market.
  • (254) The adjustments made to the export price as described at section 3.4.2 above also apply to the CIF prices used in the undercutting calculations.
  • (255) In any event, regardless of the findings of undercutting, the Commission found that the imports from China suppressed the prices of the Union industry, especially via the tender mechanism, as explained below in section 4.6.4 and caused a significant drop of sales volume and market share of Union producers.

4.6.   Economic situation of the Union industry

4.6.1.   General remarks
  • (256) 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.
  • (257) As mentioned in recital 30, sampling was used for the determination of possible injury suffered by the Union industry.
  • (258) The sweetcorn market is characterised by the existence of two sales channels, i.e. sales under the producer’s own brand and sales under retailer’s brand. Retailer’s brand sales command lower selling prices are in competition with imports from China and are under significant price pressure and represented about 70 % of the sales in the Union during the IP and [35 – 55 %] for the sampled Union producers. Sales related to own brand products will usually trigger higher selling costs intended notably for marketing and advertising and will also command higher selling prices. Evidence collected by the Commission points to the existence of price pressure exercised by the imports also with respect to this second sales channel. In essence, the evidence collected by the Commission pointed to the existence of injury caused by the product concerned as a whole, regardless of the sales channel.
  • (259) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the questionnaire reply submitted by the complainant covering data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. The data related to the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.
  • (260) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.
  • (261) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.
4.6.2.   Macroeconomic indicators
4.6.2.1.   Production, production capacity and capacity utilisation
  • (262) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 5

Production, production capacity and capacity utilisation
2021 2022 2023 Investigation period
Production quantity (tonnes) 368 786 319 410 375 541 333 973
Index 100 87 102 91
Production capacity (tonnes) 436 428 449 694 463 575 471 406
Index 100 103 106 108
Capacity utilisation (%) 85 71 81 71
Index 100 84 96 84
Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire.
  • (263) The production volume decreased by 13 % between 2021 and 2022 from about 368 790 tonnes to 319 410 tonnes. This development can be linked to the bad sweetcorn harvest that is described in recital 313, which resulted in lower production volumes. In 2023, the production volume increased by 15 percentage points to about 375 540 tonnes, representing a recovery from the bad harvest in the Union. However, during the investigation period, the production quantity dropped again significantly by 11 percentage points to about 333 970 tonnes, coinciding with the increase of Chinese imports. Overall, the production volume decreased by 9 % over the period considered.
  • (264) The production capacity of the Union industry showed a steady increase of 8 % over the period considered due to investments that were decided before the increase of the Chinese imports. Between 2021 and 2022, the capacity increased by 3 %, followed by a further increase of 3 percentage points in 2022 and an additional 2 percentage points during the investigation period.
  • (265) The capacity utilisation followed the trend in production quantity. Between 2021 and 2022, it decreased from 85 % to 71 %, followed by an increase up to 81 %. During the investigation period, capacity utilisation dropped again to 71 %.
4.6.2.2.   Sales quantity and market share
  • (266) The Union industry’s sales quantity and market share developed over the period considered as follows:

Table 6

Sales quantity and market share
2021 2022 2023 Investigation period
Union sales volume to unrelated customers (tonnes) 284 883 279 277 241 039 225 854
Index 100 98 85 79
Market share of the Union industry (%) 95 91 82 83
Index 100 96 86 88
Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire.
  • (267) Throughout the period considered, the Union sales volume dropped significantly by 21 %. Between 2021 and 2022 the sales volume decreased by 2 % from about 284 880 tonnes to about 279 280 tonnes. In 2023, the sales dropped significantly by 13 percentage points to about 241 040 tonnes. During the investigation, the sales dropped by an additional 6 percentage points to about 225 850 tonnes.
  • (268) In terms of market share, Union sales decreased from 95 % in 2021 to 91 % in 2022, representing a decrease of 4 %. In 2023, market share dropped significantly to 82 %, a decrease of 14 % compared to 2021. During the investigation period, market share slightly increased by 1 percentage point to 83 %.
  • (269) The decrease in sales volume in 2022 can be linked to the bad harvest that is mentioned in recital 313 and the reduced production volume that is reported in Table 5. However, the main decrease in Union sales volume in 2023 and the investigation period was due to the market penetration of the Chinese imports at prices which undercut the Union industry as shown in recital 253.
  • (270) The development of the market share over the period considered was impacted by the same factors and the main loss of market share in 2023 coincided with the increased market share of Chinese imports.
4.6.2.3.   Growth
  • (271) The Union industry lost 12 percentage points of market share over the period considered due to the imports from China. The sales volumes dropped significantly by 21 %. The main loss in market share can be attributed to the imports from China as it coincided with the increased Chinese market share, which increased significantly from 2 % to 15 % over the period considered, and exceeded the reduction in Union consumption that decreased by 9 %. Therefore, the Union industry did not experience any growth in terms of production and sales volumes, despite the expansion in production capacity.
4.6.2.4.   Employment and productivity
  • (272) Employment and productivity developed over the period considered as follows:

Table 7

Employment and productivity
2021 2022 2023 Investigation period
Number of employees 3 648 3 449 3 658 3 456
Index 100 95 100 95
Productivity (tonnes/employee) 101 93 103 97
Index 100 92 102 96
Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire. Source: Verified macro-questionnaire.
  • (273) The Union industry employment decreased by 5 % from about 3 460 full time employees (‘FTEs’) in 2021 to 3 456 FTEs during the investigation period. This development largely follows the trend in production capacity shown in Table 5.
  • (274) As the figures for production and employment are closely linked, productivity in terms of tonnes per employee is in line with the trend of production volume shown in Table 5.
4.6.2.5.   Magnitude of the dumping margin and recovery from past dumping
  • (275) All dumping margins were significantly above the de minimis level. 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 country concerned.
  • (276) Sweetcorn was subject to a previous anti-dumping investigation. Definitive anti-dumping measures on imports from Thailand were imposed in 2007 109 and extended following expiry reviews in 2013 110 and 2019 111. Following the imposition of measures, the Union industry was able to recover, at least partially its level of profitability and market share.
4.6.3.   Microeconomic indicators
4.6.3.1.   Prices and factors affecting prices
  • (277) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 8

Sales prices in the Union
2021 2022 2023 Investigation period
Average unit sales price in the Union to unrelated customers (EUR/ ton) [1 302 - 2 028 ] [1 473 - 2 294 ] [1 754 - 2 732 ] [1 843 - 2 870 ]
Index 100 113 135 142
Average unit cost of cost of goods sold (EUR/ tonne) [1 146 - 1 784 ] [1 323 - 2 059 ] [1 590 - 2 476 ] [1 655 - 2 577 ]
Index 100 115 139 144
Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers.
  • (278) The average sales price to unrelated customers in the Union increased throughout the period considered by 42 %. Between 2021 and 2022, the average sales price increased by 13 % from [1 302 - 2 028] EUR/tonne to [1 473 - 2 294] EUR/tonne. In 2023, the average sales price increased by an additional 22 percentage points to [1 754 - 2 732] EUR/tonne. In the investigation period, the average sales price increased further by 7 percentage points to [1 843 - 2 870] EUR/tonne.
  • (279) This apparent positive trend in average sales prices should be seen in the context of important increase of costs, especially raw material cost related to sweetcorn, cans, and energy. Despite the sales price increases, the sampled Union producers were not able to increase prices at sufficient levels, fully in line with the cost increases.
  • (280) The average unit cost of cost of goods sold increased between 2021 and 2022 by 15 % from [1 146 – 1 784] EUR/tonne to [1 323 - 2 059] EUR/tonne. In 2023, the cost further increased to [1 590 - 2 476] EUR/tonne, representing an additional increase of 24 percentage points compared to 2022. During the investigation period, the average unit cost per tonne increased by 5 percentage points to [1 655 - 2 577] EUR/tonne. As a result, the average import prices during the period considered described in recital 250 remained consistently below the average unit cost of the cost of goods sold.
4.6.3.2.   Labour costs
  • (281) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 9

Average labour costs per employee
2021 2022 2023 Investigation period
Average labour costs per employee (EUR) [29 702 - 46 250 ] [34 296 - 53 404 ] [30 203 - 47 030 ] [33 281 - 51 823 ]
Index 100 115 102 112
Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers.
  • (282) The average labour costs per employee increased in 2022 by 15 %, followed by a decline of 13 % in 2023. In the investigation period, the average labour costs per employee increased again by 12 %. The increase in the average labour costs was linked to increases in minimum wages due to inflation.
4.6.3.3.   Inventories
  • (283) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 10

Stocks
2021 2022 2023 Investigation period
Closing stocks (tonnes) [72 917 - 113 542 ] [70 300 - 109 467 ] [89 648 - 139 596 ] [112 712 - 175 509 ]
Index 100 96 123 155
Closing stock as a percentage of production (%) [143 - 222 ] [150 - 234 ] [274 - 427 ] [355 - 553 ]
Index 100 105 192 249
Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers.
  • (284) Between 2021 and 2022, the closing stock of the sampled Union producers decreased by 4 % from [72 917 - 113 542] to [70 300 - 109 467] tonnes. However, in 2023, the closing stock increased substantially by 27 percentage points [89 648 - 139 596] tonnes, with an even further increase by an additional 32 percentage points compared to 2021 [112 712 - 175 509] tonnes.
  • (285) The reduced stock level of 2022 can be linked to the bad harvest in the Union. While the increased level of stocks can be connected to a seasonal effect at the end of the calendar year, the substantial surge in inventories in 2023 and the IP was a clear effect of the rise in dumped imports from China indicating that Union producers were not able to sell their products.
4.6.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital
  • (286) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 11

Profitability, cash flow, investments and return on investments
2021 2022 2023 Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover) [8 - 13 ] [7 - 11 ] [7 - 10 ] [7 - 11 ]
Index 100 85 78 85
Cash flow (EUR) [8 548 316 - 13 310 950 ] [–7 179 488 - –11 179 489 ] [–26 396 595 - –41 103 270 ] [– 299 781 - – 466 801 ]
Index 100 -84 - 309 -4
Net Investments (EUR) [5 084 019 -7 916 544 ] [9 363 438 -14 580 211 ] [14 746 664 -22 962 663 ] [12 310 955 -19 169 915 ]
Index 100 184 290 242
Return on investments (%) [17 - 27 ] [15 - 23 ] [14 - 21 ] [13 - 20 ]
Index 100 88 79 76
Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers. Source: Sampled Union producers.
  • (287) The Commission established the profitability of the sampled Union producers 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.
  • (288) The profitability decreased by 15 % over the period considered.
  • (289) Despite being still profitable, the Union industry remained constantly below the target profit of 14 % during the period considered. The trend on profitability should be considered in light of the significant decrease in sales volumes, the decreased production, capacity utilisation, and employment, as well as the significant increase of stock levels and the delayed effect of the tenders and the annual duration of the contracts. In essence, the Union industry was able to maintain a positive profitability level but at the expense of its sales volumes.
  • (290) The net cash flow is the ability of the Union producers to self-finance their activities. Between 2021 and 2022, cash flow dropped dramatically by 184 %. In 2023, cash flow decreased further by 225 percentage points. During the investigation period, cash flow recovered to almost the same level as in 2021.
  • (291) The sampled Union producers continued to invest during the period considered as demonstrated by the investment figures above. Investments increased by 84 % from [5 084 019 - 7 916 544] EUR in 2021 to [9 363 438 - 14 580 211] EUR in 2022. In 2023, investments increased by 96% to [14 746 664 - 22 962 663] EUR. During the investigation period, investments increased by 38 % to [12 310 955 - 19 169 915] EUR. Investments were made for the expansion of production capacity as described in Table 5 and for the replacement of equipment. Overall, the industry is very capital intensive with the need for large investments into production facilities. The Union industry was able to raise the necessary capital. However, in case no measures will be imposed, not only future investments will be at risk but also the future of the existing production plans.
  • (292) The return on investments is the profit in percentage of the net book value of investments. Between 2021 and 2022, it decreased by 12 % from [17 - 27] % to [15 - 23] %. In 2023, the return on investment further decreased by 9% to [14 - 21] %. During the investigation period, the return on investment recorded an additional decline by 3 % to [13 - 20] %.
4.6.4.   Analysis of tenders
  • (293) Retailer brand products represented about 70 % of the total sweetcorn sales in the Union during the period considered and about [35 - 55] % of the sampled Union producers’ sales. All retailer brand sweetcorn is sold in the Union through tender processes. During the process of tender sales, Union producers compete indirectly with Chinese exporting producers that sell their products via importers. In order to obtain the necessary insights into the sweetcorn market, the Commission requested detailed information on tenders from the sampled Union producers and importers. Information was requested on the characteristics of the tenders, such as process, timing and other relevant characteristic.
  • (294) The investigation showed that tenders can be organised in different forms, such as online platforms or through email, telephone, or in-person communication, depending on the business and sales model of the negotiating parties. Tender negotiations take place between May and August of a given year for sales covering the year following the negotiations.
  • (295) The tender process takes place in different stages. First, Union sweetcorn producers request information from retailers about their need of own and retail brand products. Retailers respond with their volume need. A retailer may also initiate tender discussions by requesting details regarding available volumes that producers can sell to retailers. Retailers usually initiate discussions with multiple producers simultaneously, including Union and non-Union producers. In a second step, sweetcorn producers respond to the retailer’s request with volume offers and corresponding prices. Third, the retailer and Union sweetcorn producers or EU importers enter into negotiations, typically focusing on the price of sweetcorn. For own brand sweetcorn, retailers generally negotiate on the price, and not on the volume. Fourth, the retailer decides on the volume allocation among different sweetcorn producers and suppliers, and the parties finalize the sales agreement for the upcoming year. Fifth, once the negotiations are completed, Union and non-Union sweetcorn producers supply the agreed volume throughout the September-August period at negotiated prices.
  • (296) Chinese imports impact the tender negotiations as they hinder the ability to negotiate fair prices and reduced the number of won tenders. As a result, production volumes of Union producers had to be reduced, the industry is subject to high fixed costs that remained unchanged and therefore the fixed costs per unit increased. The Chinese imports impacted also indirectly the sales of own brand product, considering that consumers tend to be price sensitive and prefer to buy the cheaper retailer brand product if the price gap to own brand products is significant. The information submitted by the Union producer confirmed also a significant decrease of the ratio of tenders won by the latter.
  • (297) Given the nature of tenders and of the sweetcorn production and sales cycle, a delayed effect of the imports also needs to be taken into consideration. Taking into account that tenders are negotiated for the following year, starting as from September, the effect on volumes and sales prices will take effect only in the following year. Therefore, the effect of the price pressure exerted by the Chinese prices during the investigation period are still not fully visible as they will continue to develop after the period considered. As described in recital 289, stock levels increased significantly at the expense of sales volumes.

4.7.   Conclusion on injury

  • (298) The deterioration of the economic situation of the Union industry took place in a market of slightly decreasing demand. Over the period considered, consumption decreased by 9 %, but the Union industry market share dropped of a larger extent, from 95 % in 2021 to 83 % during the period considered. This was linked to the price pressure generated by Chinese imports, with significant price undercutting and, in any event, with price suppression considering that the Chinese imports remained constantly below the average unit costs of the costs of goods sold. Such price suppression prevented the Union industry to adjust their sales prices fully in line with the price increases related to raw materials, resulting in a decreasing profit that remained constantly below target profit over the period considered, coupled with a significant decrease in sales volume.
  • (299) Even though the development in sales prices showed a positive trend during the period considered with an increase of 42 %, this was linked to the significantly increased prices of the main raw materials. However, the sales price increases did not allow to fully cover the raw materials price increases that were reflected in the increase of 44% of the average unit cost of the costs of goods sold and resulted in the drop of the sales quantities of 21 %.
  • (300) Most indicators showed a negative trend, with a decreased profit of 21 % and decreased cash flow of -104 %. Sales and production volumes, as well as capacity utilisation decreased significantly during the investigation period, indicating volume injury. Closing stocks of finished goods were impacted by the Chinese imports and increased significantly which also had a negative impact on cash flow and substantially increased fixed costs. Prices of Chinese imports remained constantly below the level of the Union industry’s average sales prices and average unit costs of the costs of goods sold. The development of Chinese import prices in light of the increasing quantities and negative injury indicators clearly demonstrated price pressure.
  • (301) During the period considered the Union industry managed to carry out investments to expand production capacities. While the decisions to carry out those investments were taken before the rise of Chinese imports, future investments might be at risk in case no measures will be imposed.
  • (302) On the basis of the above, the Commission concluded at this stage that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

5. CAUSATION

  • (303) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by known factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These known factors are: imports from third countries, export performance, reduction in consumption and other factors, including the bad sweetcorn harvest in 2022 in the EU, floods in Thailand, and the impact of the Ukraine war on raw material and energy costs.

5.1.   Effects of the dumped imports

  • (304) As shown in Table 3, the volume of dumped imports from China increased significantly from around 6 480 tonnes in 2021 to 40 050 tonnes in the investigation period. In terms of market share, the dumped imports from China increased from 2 % in 2021 to 15 % in the investigation period.
  • (305) The average price of Chinese imports was always significantly below the average price and average unit cost of the cost of goods sold of the Union industry. Between 2022 and the investigation period, the Chinese average import prices decreased significantly by 33 %, while undercutting was confirmed in recital 253.
  • (306) These observations coincided with a 12 % decrease in market share of the Union industry over the period considered from 95 % in 2021 to 83 %. This drop exceeded the drop in consumption of 9 % over the period considered.
  • (307) The Chinese imports showed a considerable negative effect on the sales volumes of the Union industry, which dropped significantly in 2023, and the investigation period as described in recital 266. The production volume decreased by 9 percentage points during the investigation period. At the same time, the Union industry’s ratio of successful tenders significantly declined, while the stocks (in absolute terms, and also both in terms of production and sales) substantially increased. Such trends, in particular those on sales volumes and market shares, can be linked to a volume injury caused by the Chinese imports.
  • (308) As explained in recital 255, imports from China caused price suppression to the Union industry in 2023. Such price suppression meant that, while the unit cost of the Union producers increased by more than 30 % in 2022 and an additional 13 % in 2023 due to increased raw material and energy costs, Union producers were unable to adjust their sales prices fully in line with the price increase related to raw materials. As a result of this price suppression, the profitability decreased over the period considered. Although the profit remained positive, it remained below the target profit over the period considered. The coincidence in time between the deterioration in the economic situation of the Union industry and the significant presence of dumped imports from China, undercutting the Union industry’s prices, and supressing Union market price levels, confirms a causal link between the two.
  • (309) Based on the above, the Commission concluded that the dumped imports from China caused material injury to the Union industry.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

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