Product
being dumped
The
definition of the product concerned as farmed salmon is very vague. According to
Taric, the European tariff database, the classification codes used in this
regulation cover a variety of different salmon species. These include: Pacific
salmon (Oncorhynchus nerka, Oncorhynchus gorbuscha, Oncorhynchus keta,
Oncorhynchus tschawytscha, Oncorhynchus kisutch, Oncorhynchus masou and
Oncorhynchus rhodurus), Atlantic salmon (Salmo salar) and Danube salmon (Hucho
hucho). Yet, under European labelling laws, it is necessary to ensure that all
fish are properly labelled to include both the correct scientific name as well
as the common name. The use of just the term ‘salmon’ is illegal and yet the
Complainants have lumped all farmed salmon together irrespective of whether they
are Atlantic salmon or one of the farmed Pacific species. The submission is
misleading by not stating that the product concerned is farmed Atlantic salmon
(Salmon salar) from Norway.
Norwegian
costs of production – constructed Normal Value.
The
Complainants have detailed the construction of the Norwegian cost of production
in Annex 7. This has limited access because the complainants claim that
disclosure would be of significant competitive advantage to a competitor and
would have a significantly adverse effect upon the person supplying the
information. It is very difficult to understand how a ‘constructed’ value
could be construed of being of any competitive advantage. The only way that it
would have an adverse effect on the person supplying the information i.e. the
Complainants, is that the construction would be open to criticism and shown to
be invalid.
The
complainants state that the average cost of production in Norway for slaughtered
whole fish equivalent during 2003 is NOK 19.52/kg. Whilst the complainants
prefer to use a constructed value, actual values are available. Every year, the
Norwegian Department of Fisheries publishes annual cost of production data. This
shows that the total cost per kilo including slaughtering costs is NOK 19.22.
This is actually very close to the Complainants figure. However, the official
cost of production data has been recalculated using a larger sample and the
actual average cost of production is NOK18.36/kg.
Norwegian
and EU producers treat fish in different ways. For example, Norway tends not to
trade in whole fish, which means that the Complainants have converted the
figures so that it can be presented in the way they would for their own fish.
However, gutting costs would normally be including in the slaughtering costs so
that by including the conversion of the fish to gutted weights means that the
Complainants have included the cost of gutting the fish twice.
The
Complainants have taken this figure and deducted NOK 4.45/kg for slaughtered to
FOB costs to arrive at a slaughtered gutted price. How the figure of NOK 4.45/kg
is calculated remains confidential so it cannot be challenged. However, best
estimates would suggest that a true figure would be nearer NOK 0.6/kg.
The
Norwegian Seafood Export Council figures for the export price for Norwegian
salmon during the first part of 2004, covering part of the period covered by the
submission, puts the average selling price for Norwegian fish FOB at NOK
23.35/kg. This compares with NOK 22.73/kg quoted by the Complainants.
The
selling price –
NOK 23.35/kg
The
cost of production – NOK 21.83/kg
(including
15% profit which the Complainants claim is the industry standard)
These
figures may be simplistic but without details of the constructed calculation, it
is impossible to compare this data with that used by the Complainants. However,
there is a major question mark over validity of their calculation. The
Complainants argue that 15% normal profit should be added to the cost of
production, however, they have actually added 17.5% - NOK 3.44/kg and not 15%
which would be NOK 2.96/kg.
They have also stated the wrong conversion factors in Annex 3. To allow
for gutting, whole fish equivalent should be divided, not multiplied by 90%.