An update on the Australian Paper Dumping Case
Written by Belinda Lyone, General Manager of Strategic Sourcing
As the largest privately owned Australian office products supplier COS is very proud to range products manufactured in Australia where we have competitive access. Where this is not possible we import directly from established supply chain sources from pre-qualified ethical and quality standard approved manufactures. Over the past year there has been an active anti-dumping investigation into the import of paper into Australia. COS proudly offer our customers Australian made paper as well as papers imported papers certified by both PEFC and FSC.
Whilst dumping cases are common practice by manufacturing industries in both Australia and internationally they are complex and convoluted so we felt it would be useful to answer some commonly asked questions and dispel any myths about the cause and impact of this case.
What is dumping?
In April 2016 an investigation was initiated by the Anti-Dumping Commission (ADC) at the request of Australian paper who alleged that Brazil, China, Indonesia and Thailand have been dumping paper into Australia.Â Nippon Paper Group is a Japanese owned company who own the local paper mill in Victoria. In its most simple terms dumping is defined as exporting a product to Australia and selling it for lower than you sell in the country of production.
You might not be aware that the majority of paper sold in Australia is imported. The investigated countries represent 52% of the paper supplied to the Australian market. It seems that the Australian mill was struggling to compete against imported products and they asked the Australian government to investigate. The outcome of the case was that some mills in investigated countries were found to be selling paper into Australia cheaper than they were selling locally.
Noteworthy prior to the Australian case beginning in April in January 2016 Australian paper was found to be dumping into America and withdrew selling to that country. Prior to this case Australian paper had been dumping approx. 48,000 tonnes per year to the US.
Was COS impacted by the dumping case?
This has cost everyone a lot of time and money during the investigation process. Whilst it is well understood that Australian Papers relationship with Staples prevents them from offering COS equality in pricing and limitations range we are a small pawn in a bigger game.Â We represent less than 10% of imported paper investigated, the bigger targets were Fuji Xerox and Office Max who together would represent more than 50% of the investigation and were not able to purchase private label through the Australian mill.
The outcome of the case is that the majority of what was being imported from these countries were found to be price dumping and the government has imposed a duty on specific mills within the investigated countries. In the scheme of the investigation COS was impacted the least with our recycled mill in Indonesia cleared of any dumping charges and our virgin mill in Brazil with the lowest duty imposed of 2.9%. Fuji Xerox main source exporting from China to had duties in excess of 30% imposed. The case is currently in the appeal process and mills are fighting aggressively to have the duties reversed.
Will we have supply issues?
No we wonâ€™t. The dumping case has tested the strength of our supply chain and Iâ€™m pleased we have not experienced any gaps in supply. The case has been a slow and drawn out process providing ample time to put back up sources in place globally in case of worst case scenarios in any of our mills.
Will the cost of our paper go up?
Itâ€™s interesting if the mill was struggling to compete how their two biggest customers Staples & Officeworks can be seen to be selling paper at under $3 per ream. Itâ€™s likely weâ€™ll see $3 price points of Keji â€“ an Australian made paper disappear
In the short term we will be protected by our supplier agreements. This results in the mills needing to absorb the additional charges. As these agreements come up for renewal COS will go through a tender process and seek the best offer at that point in time from all countries capable and interested to export to Australia. However this dumping case sends a signal to paper mills globally that the price of paper in Australia needs to rise.
The idea of a dumping case is to raise the prices of a product. It is therefore likely the market price of paper will go up. Whilst Iâ€™m confident with our volumes we will be able to source paper as competitively as anyone else in the market I cannot guarantee that this will not be at a higher rate than currently.
Why doesnâ€™t COS just buy their paper from Australian Paper?
We would like to support the Australian mill more however Nippon Paper, the owner of Australian Paper, continue to refuse to produce private label for COS. For at least the past five years we have given Australian Paper the opportunity to manufacture our private label requirements. As recently as June 2017 it was confirmed Australian paper were unable to support production of our exclusive COS and Muru 100% recycled papers. Nippon paper have made a business decision to limit the amount of businesses that they produce private label for & unfortunately COS was denied access. This is a disappointing decision
Whilst we are unable to support Australian Manufacturing to the full extent in this category, we proudly sell Australian 100% recycled. For our customers who wish to proactively support Australian communities we proudly range Muru 100% recycled paper, made in Indonesia. Every sale of Muru paper contributes towards the support indigenous communities in Australia.
We have over 21,000 products for every room in the modern office.
REGISTER to view our competitive prices.
Register NOW to receive a FREE 1.3kg bag of Allen's Snakes valued at over $15*
*Spend $100 ex GST. To redeem enter SWEETDEAL at checkout. One bag per company.
Access to over 21,000 products tested for business
Business tips and information
Exceptional customer service
Special Offers and discounts
Government / Education Customer Registration
Over the years weâ€™ve developed a high level of expertise providing innovative workplace supply solutions to all levels of Government. We pride ourselves on understanding the needs, requirements and procurement policies of Government customers.