ANTI-DUMPING ORDER (SACCHARIN) (Hansard, 17 November 1965)

§ The Minister of State, Board of Trade (Mr. George Darling)
I beg to move, That the Anti-Dumping Duty Order 1965 (Si, 1965, No. 1599), dated 16th August 1965, a copy of which was laid before this House on 23rd August, in the last Session of Parliament, be approved. I hope; that this Motion will be equally non-contentious.
This Order has been made under the Customs Duties (Dumping and Subsidies) Act, 1957, and is concerned with saccharin, an artificial sweetener mainly used in the production of soft drinks. Hon. Members may not have appreciated that. I understand that the saccharin that we who are trying to slim put in our tea or coffee forms a fairly small part of total consumption.
The Order imposes anti-dumping duties of l0d. per lb, on saccharin originating in Japan and 5s. per lb. on saccharin originating in the Republic of Korea. In accordance with normal practice, the Order also provides for importers to obtain relief from the duties under Section 3 of the Act in respect of consignments which the importers can show are not dumped or are not dumped to the full extent of the duty.
As the House knows, before duties can be imposed under the Act the Board of Trade must be satisfied not only that dumping is taking place but also that it is causing or threatening material injury to a British industry and that the antidumping action would be in the national interest. In this case, the application was made by Boots Pure Drug Company Ltd., and Monsanto Chemicals Ltd., which are responsible for all the saccharin produced in Britain.
When the Board of Trade was satisfied that there was prima facie evidence that imports from Japan and the Republic of Korea were dumped and were threatening material injury, a public announcement was made on 5th March inviting representations from interested parties. Then, after a detailed investigation, in which all the evidence submitted was fully taken into acount, my right hon. Friend the President of the Board of Trade was satisfied that imports of 1290 saccharin originating in Japan and the Republic of Korea were dumped, that these dumped imports constituted a clear and imminent threat of material injury to the British industry and that the imposition of anti-dumping duties would be in the national interest.
The House will appreciate that it is impossible to give detailed reasons for our findings, since these were based on commercial and financial information given to the Board of Trade in the strictest confidence, and, in the same way as the previous Order imposed confidence upon us, so it is with this operation. But I assure the House that the Board has investigated the case very carefully, including the costs and returns of the British producers, and is satisfied that, if no action had been taken, the British industry would have had to make substantial and seriously uneconomic price reductions in order to avoid losing a large part of the domestic market to dumped imports. The duties came into force under this procedure on 24th August. In announcing the decision, the Board of Trade gave a general warning that if imports of saccharin originating in other countries were found to be dumped, they, too, would be liable to anti-dumping action.

§ Mr. Peter Emery (Reading)
I join with the Minister of State in congratulating my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) on his first appearance at the Dispatch Box. There are many hon. Members who would have been only too delighted to have made the progression from back benches to the Dispatch Box in 12 months, that is to say, as quickly as my hon. Friend. I, too, expect to be crossing swords with the Minister of State for a number of years, but I believe that his hope about present positions is an artificial sweetener. He is much more likely to find himself on this side of the House than staying where he is.
Can the Minister tell the House approximately how much of the saccharin and salts had been brought into the country, or, if that is confidential information, the approximate percentage of overall production? That is important so that it can be seen that anti-dumping action is taken only when 1291 necessary and not when imports are just a small irritation to domestic producers.
There seems to be a vast divergence between the rates of duty. Can the Minister say that the rates of duty are likely to bring the products of the two countries concerned to approximately the same sale price once unloaded in this country?
The obvious thing about the Order is that the Government are following a policy brought about by the Conservative Government, but as a bipartisan policy, to ensure that there should be no unfair dumping of chemicals in this country. The policy was in furtherance of the British chemical industry, but neither side wants to ensure that we build up barriers or that there is featherbedding or protection. We on this side of the House would not want that in any way. If we can have answers to my questions, we shall be more than happy to support the Order.

§ Mr. Darling
By leave of the House; I do not think that giving the percentage of saccharin and salts which are dumped as against total production in this country would meet the case. This is industrial saccharin and not that which is sold retail to domestic consumers. The method of selling is on contract a long period ahead. The difficulty which the industry faced was the prospect of further dumping when contracts were being made over a period of time. I do not have the figures with me in a form in which they could be disclosed, but we might be able to answer the hon. Gentleman's question in a way which does not disclose confidential information, and I will certainly look into that.
The reason for the difference between the two duties is quite simple. It is the different margins by which the imports from the two countries were found to be dumped. In other words, it is due to the difference between the Japanese and the Korean domestic and export prices. The third point is really a question of efficiency of the industry. Because there is an element of monopoly 1292 here, the Board of Trade has looked into this very carefully indeed.

§ Mr. Peter Emery
Duopoly.

§ Mr. Darling
The hon. Member can put it that way if he likes. I have always found, when there are two firms, that it is best to talk of monopoly, but I will not quarrel with the hon. Member. Because there is this duopoly, or monopoly, the Board of Trade has looked at the efficiency of the industry very carefully, particularly its cost of production, and the prices which it charges. We have no reason at all to believe that British producers are not efficient. They are constantly improving their plant—and we have evidence of this. We have had to take some measurement as to what the prices should be, but we understand that the saccharin prices in this country are just about the same as those in the United States of America, and we thought that, in view of the American industry's efficiency, this was a good yardstick.
I am quite confident, from the discussions the Board of Trade has had with the two firms concerned, that they are not hiding behind this anti-dumping law and that nothing will be done by either firm to increase prices to the consumer. The whole purpose of the exercise is to keep prices stable, and thus to see if benefits can be passed on to the customer by the increasing efficiency of the two firms. I am sure that from the assurances that we have had we need have no qualms about this.