SASKATOON – Justice has been ladled out to Italian pasta makers by Revenue Canada.
The department has imposed provisional duties on imports of dry pasta after finding the Italian firms guilty of dumping and subsidizing shipments to Canada in 1994-95.
Now it’s up to the Canadian International Trade Tribunal to decide by May 13 whether the imports have hurt Canadian manufacturers.
If the answer is yes, the duties , which went into effect Jan. 12, will remain in place. If it’s no, they will be terminated and any duties paid will be refunded.
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Don Jarvis, spokesperson for the Canadian Pasta Manufacturers Association, welcomed the preliminary ruling and said the industry will have no trouble proving injury to the CITT.
“Companies have been unable to cover their costs and have suffered injury both in loss of market share as well as loss of profits,” he said.
The domestic industry’s share of the dry pasta market declined from 80 percent in 1992 to about 70 percent in 1995. And even though the price of durum wheat has increased sharply, Canadian manufacturers have been unable to increase the price of their product because of competition from the dumped Italian pasta.
Profits and jobs said in jeopardy
The four pasta companies in Canada (Borden-Catelli, Primo Foods Ltd., Italpasta Ltd. and Grisspasta Products Ltd.) launched their complaint in June 1995, saying profits and jobs were threatened by the Italian imports.
The industry employs about 600 people, with one plant located in Western Canada at Lethbridge.
In announcing its preliminary decision, Revenue Canada said it found that 99 percent of the pasta exported by Italy during the period in question was dumped, which means it was sold to Canadian importers for less than the selling price in the domestic Italian market or at less than the cost of production.
It studied 13 companies which accounted for 80 percent of Italian exports and found dumping margins ranging from zero to 50 percent, with a weighted average margin of 27 percent.
Products subsidized
Ron Carson of Revenue Canada said the provisional duties range from 13 to 100 percent of the export price, depending on the company. For those companies not examined, the duty is 23.5 percent.
The department also found the Italians guilty of shipping products that have received government subsidies of around 18 cents a kilogram. While subsidy payments are not now being made, the programs remain in place and could be started again at any time.
Revenue Canada will continue its investigation and on April 11 will issue a final ruling. The CITT investigation includes a public hearing April 9 in Ottawa.
