The European Branded Footwear Coalition, which is comprised of several athletic and outdoor footwear companies like ECCO, Timberland, Merrell, Rockport, Sebago, Teva, Ugg, and Simple, is concerned about a possible “detrimental impact” of the current European anti-dumping investigation being conducted targeting leather footwear.
“We have seen from the European Commission's mishandling of the apparel quota matter that establishing trade restrictions across EU Member States can have significant negative impact on retailers and consumers. Unfortunately, the current leather footwear investigation is improperly founded and has the potential to cause significant increases in footwear prices and to limit the styles of footwear that are available to the European consumer,” said Richard O'Rourke, Timberlands VP/GM for Europe, in a prepared statement. “Members of the EBFC have made significant investments in the EU footwear market and believe that all producers should price their products fairly and without the use of dumping or other prohibited unfair trade activities. However, the current investigation is so broadly framed that it cannot effectively target any actual unfair trade practices.”
Last month, the European Commission reversed its decision to place growth limitations on imports of 10 apparel categories, including sweaters, to a maximum of 12.5% per year for 2005, 2006, and 2007.
The effect of this limitation was much the same as similar quota issues seen in the U.S. Suppliers scrambled to bring their goods into the EU before the quotas were filled (See BOSS_0535). Once the quotas were met, all goods were embargoed, and retailers could not receive shipments. The resulting shortfall caused the EC to remove the growth limitations.
This latest investigation could cause a similar ripple effect. If the ECs investigation concludes with a quota or embargo, imported footwear could be held up in customs houses and never see the retail floor. For any athletic footwear company that produces leather footwear and imports the goods to the EU, this could have serious implications.
The EBFC members concerns with the Commission include the fact that the Commission has not appropriately narrowed the scope of the investigation to target specific footwear, if any, being improperly dumped in the EU market at artificially low prices.
Also, the organization claims that the economic basis of the investigation is flawed and fails to consider basic open market factors such as the impact of currency exchange rates and EU footwear producers cannot supply all of the European demand for high quality, leather footwear.