By Brian Johnson - 27th July 2006
A row over import tariffs for US style refrigerators is threatening to escalate into EU fridge wars after a Brussels rethink saw levies on certain Korean imports being dropped.
The European commission, pressed by European manufacturers, has been investigating claims that Korean producers - specifically LG Electronics and Daewoo - have been dumping large, US style, side-by-side fridge-freezers on to EU markets at less than cost prices.
EU trade commissioner, Peter Mandelson had earlier hinted that Brussels would apply a blanket 12.2 per cent tariff on Korean produced side by side fridges, including a three door bottom freezer variety.
But the British commissioner decided at the last minute to exempt three door refrigerators from levies after “confidential consultations” revealed that no company in Europe manufactured the three door fridges in Europe.
Whirlpool the US based manufacturer and direct competitor to the Koreans called the decision to drop the tariffs “a serious breach in procedures” and accused Mandelson of succumbing to “devious lobbying activity”.
“The inexplicable u-turn seems to have been caused by Korean lobbying at the highest level,” said Whirlpool Europe president, Marc Bitzer.
FT Europe on Friday reported commission officials defending Mandelson’s decision.
“There is no European production of these three door fridges, so the idea that European industry is damaged by cheap Korean fridges coming into the EU is a bit hard to argue, the paper reported one EU official as saying.
“Whirlpool exports these fridges to Europe from the US and are effectively asking [for] a commercial favour to help them compete against Korean rivals. This is not what our anti-dumping measures are about.”
Whirlpool has a manufacturing plant in Italy, but imports their three door fridges from the US.
LG, which plans to invest €100m on a new manufacturing plant in Poland, has recently been pressing the commission to exempt three door fridges from the punitive tariffs.
In a letter earlier this month to the commission, Polish MEP Konrad Szymanski said he had concerns about the “misuse” of anti-dumping legislation against Korean manufacturers.
“Inclusion of three door bottom freezer refrigerators undermines the credibility of the side-by-side proposals,” said Szymanski.
“It would send the wrong signals to a firm [LG] that has pledged to invest so much in my country.”
Industry sources believe the row is likely to escalate into EU fridge wars as Whirlpool seeks US politicians “at the highest levels” to lobby Brussels for a rethink.
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