A proposal to extend anti-dumping duties on footwear from the Far East has incensed the industry. Voice your opposition by joining our campaign to Dump the Duties.
The UK footwear industry is facing a new year of crippling anti-dumping duties on leather footwear imported from China and Vietnam if the EU’s proposal to extend the duties, at 16.5% and 10% respectively, for a further 15 months gets the go-ahead from a majority of member states later this year.
The sector has already been forced to raise prices of footwear to the consumer by an average of 10% and take a hit on margin since the duties were introduced three years ago, according to the European Footwear Alliance (EFA).
The footwear sector has been one of the hardest hit sub-sectors in the downturn, with the collapse of chains such as Stead & Simpson, Faith and Shoe Studio Group. While their difficulties cannot be blamed on duties alone, these have surely been a contributing factor and have also had a knock-on effect on employment through the supply chain.
Last week, Drapers kicked off a Dump the Duties campaign, in conjunction with the British Retail Consortium (BRC) and with the support of the British Footwear Association (BFA), urging the EU to abolish its plans to extend the duties by 15 months. The proposals have incensed the industry, which is concerned the tariff extensions could roll on indefinitely.
Andy Rubin, chief executive of branded supply group Pentland Brands, says: “The anti-dumping duties are intended to protect EU footwear manufacturing, but a large proportion of the product being bought from China is not even being made in the EU.
“We are not talking about premium, high-end footwear that can be made in the EU, but commercially priced sports and fashion shoes. The net effect is to restrict choice and value for EU consumers at a time when they are feeling the effects of the downturn.
“Anti-dumping duties are anti-competitive in a supposed free market economy,” says Anthony Smith, chief executive of value footwear chain Shoe Zone, which rescued Stead & Simpson from administration in 2008. “The tax does not make us buy more from Europe and therefore defeats the object.”
David Rist, managing director of comfort brand Hush Puppies, which manufactures footwear in the Far East, says: “From a product point of view, brands have to manufacture in the Far East to be able to bring the right designs and technology to the end consumer. Europe is ruled out because of the high price of manufacturing.”
Other retailers point out that European factories are not geared up to deal with their huge volumes either.
Compounding the pressure on the footwear sector is that the value of sterling remains weak against the euro and dollar. This means footwear firms are unable to offset the duty costs as easily.
On November 10, 27 member states will vote on whether to extend or abolish the duties.
Need to know: anti-dumping duties
What are anti-dumping duties?
Dumping is said to occur when a product exported by one country to another is priced lower than it is domestically. This is considered as unfair trade and duties are imposed to penalise the exporting country.
Why were these footwear duties imposed by the EU?
In 2006, the European Commission decided that imports of leather footwear were being dumped on the European market. The Commission imposed duties of 16.5% on Chinese footwear and 10% on Vietnamese footwear, promising they would only last two years. Two years became three years and then there was a 15-month extension. Now the threat is for a further 15 months of duty.
What products are affected?
Any leather footwear, be it stilettos, men’s formal shoes, hiking boots or kids’ shoes are hit by the duties. Even though many of these products can no longer be made cheaply in Europe, they are still subject to the tax.
How much extra cost will the duties inject into the supply chain?
The importer or retailer has to pay the customs authorities where the footwear lands. The duty is levied on the cost of the import, and on average a pair of leather shoes from China costs about £9, according to the EU. So the average duty you pay is about £1.50 per pair. A group of footwear companies recently said that together they had paid out more than £700m in anti-dumping duties since 2006.
Who benefits from the duties?
In theory, European producers of footwear will be protected from Chinese and Vietnamese competition. But in practice, the real beneficiaries are countries like India and Indonesia which get the business that China and Vietnam loses. European footwear producers will see no change to
their orders, as they serve a different customer who will pay upwards of £70 or £80 for a pair of shoes.
Who loses out?
The consumer, and particularly the low-income consumer who has to bear the burden of this unjust tax. Low-income consumers rely on Chinese and Vietnamese imports to be able to afford leather footwear. Retailers believe it is akin to asking the poorest people in society to subsidise wealthy factory owners in Italy and Spain.
When will the decision whether to reimpose the duties be taken?
There are two possible dates, either November 10 or November 19. The decision will be taken by a vote of European member state trade experts at a meeting in Brussels. As there are 27 member states, 14 are needed to vote down the extension.
How can I make my voice heard?
The person responsible for taking this decision is the commissioner for trade, Catherine Ashton. The people who can influence the commissioner are your local MEPs. The BRC and the BFA can help you contact your local MEP, so do not hesitate to contact firstname.lastname@example.org or email@example.com for further information.
Alternatively, you can locate your local MEP by entering your postcode at www.writetothem.com.
Send a letter to your local MEP
Below is an example of the type of letter you should write to your local MEP in support of our campaign. Please add your own words and experiences too.
I am very concerned about the prospect of another 15 months of European anti-dumping duties being imposed on imports of leather footwear from China and Vietnam.
As an importer/retailer/footwear producer the cost of these duties to my business amounts to and
in this economic climate will have a serious impact on our ability to invest in our products and people. I am already struggling to survive as consumers are simply not buying these days. Why is the EU further penalising me? If the duties are extended I may well have to shed staff or cut back on future investment.
As my elected representative, I would urge you to call on the EU trade commissioner to scrap these plans and help hard-pressed UK businesses.