10 March 2015
Dumped goods are a killer for industry
People talk about “dumped” goods, but very few understand how complex a legal issue it can be. For local companies, dumped products can spell the death-knell for their business.
Dumping goods means products are sold cheaper in, say, Australia than in their country of origin.
Yet that simple concept is complex to prove and difficult to police. Notwithstanding that Australia has an Anti-Dumping Commission — which investigates allegations — the success rate is relatively poor and the time taken to prove a case can be fatal to the local industry or company.
Two recent cases highlight the problems: Capral Aluminium proved extruded aluminium products were being dumped into Australia from China. Action was taken by government to increase tariffs on guilty companies from 7 to 57 per cent.
The only problem in this case is it was originally lodged in 2009. It took six years to correct a wrong that could have killed an industry.
The other case involved fruit-preserving company SPC Ardmona against tinned South African peaches and Italian tinned tomatoes. In this case, higher duties have already been imposed on the Italian tomato companies, but further consideration is being given to European subsidies, which give an extra advantage to the foreign product.
Consider also the old mantra of the “Buy Australia” campaign — that you should buy Australian unless you find a comparable foreign product at a cheaper price. The issue was with the dollar working in the foreign companies’ favour — and dumped product giving a serious advantage — local companies felt they have been thrown to the wolves.
But for every large company that takes on a case and provides data to the Anti-Dumping Commission, there are dozens of small companies without the resources to withstand the competition of dumped products.
They get knocked over by cheap alternative products and — in some cases — foreign goods that may have been directly stolen from them, just produced elsewhere.
One positive is the move of the Anti-Dumping Commission from the care of Customs and Border Protection to the Department of Industry. It means industry can get its complaints heard more directly than through the prism of a customs regime.
The danger with Chinese imports (as with Capral) is that by the time authorities catch up with dumpers, they may have destroyed a company, or an industry. It is now suggested 55 per cent of extruded aluminium in Australia is from China.
Cheap imports a trucking nightmare
You can go broke sitting on a beach. You don’t have to work your guts out doing it.”
That statement sums up the depth of David Dickman’s frustration at the dumping into Australia of products from China.
The former swimmer says, when he raced, everybody lined up at the starting blocks as equals. But what he saw in his business — Transalloy — was something altogether different.
Transalloy, based in Ingleburn, makes aluminium and steel truck bodies, specialising in one-tonne trays. It is one of the biggest suppliers in Sydney.
“We used to do anywhere up to four to five one-tonners a day. Now I am lucky to do one a day.” That’s how much the imported competition bit into Transalloy’s traditional bread and butter.
Mr Dickman has even seen Australian-designed products ripped off by manufacturers in China, who have attempted to sell them back to Australia.
Mr Dickman’s problem is that, unlike Capral or SPC Ardmona, he is not big enough to take on the foreign importers he feels are dumping products into Australia.
At one stage, he thought he should investigate joining the throngs of Australian companies sourcing products from China, or manufacturing there. So he visited China several times and even sourced some extruded aluminium products — but he was never that happy with the results.
That’s not to say he ignores the cost advantages of sourcing products from overseas. Locks and hinges for his trays now come from China, saving around $170,000.
“I can’t produce it for the price I’m buying it from them,” he says. Which sums up the heaven and hell experienced by a multitude of Australian manufacturers.
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