China Faces Five-Year Renewal of EU Tariffs on Tartaric Acid

The European Union renewed tariffs against China on a chemical used in industries from construction and pharmaceuticals to food and drinks so Italian and Spanish manufacturers avoid stiffer competition.

The EU reimposed the duties as high as 34.9 percent on tartaric acid from China for another five years. Tartaric acid is the main acid in grapes and can also be made synthetically from petrochemicals.

The levies punish Chinese exporters such as Changmao Biochemical Engineering Co. for selling tartaric acid in Europe below cost, a practice known as dumping. The goal is to help EU producers including Italy’s Distillerie Mazzari SpA and Spain’s Alcoholera Vinicola SA.

“Significant volumes of imports from China are still being dumped,” the 27-nation EU said in a decision published today in the Official Journal. The renewal is the outcome of a probe that prevented the measures, introduced in January 2006, from lapsing as originally scheduled in January 2011.

Dumped tartaric acid from China accounted for 12.2 percent of the EU market in 2010 compared with 11.3 percent in 2007, according to the bloc. The anti-dumping duties range from 4.7 percent to 34.9 percent, depending on the Chinese exporter. Changmao Biochemical Engineering faces a 10.1 percent levy.

A company called Hangzhou Bioking Biochemical Engineering Co., which won a zero duty rate in 2006, remains exempted from the duties under the decision to renew them. The latest decision excludes Hangzhou Bioking from the measures rather than setting a zero tariff rate on the company.

Europe’s industry, located mainly in Italy and Spain, is composed largely of companies whose primary activity is the production of alcohol from wine lees, a process for which tartaric acid is a by-product, according to the EU. Chinese exporters sell the synthetic form, according to the bloc.

“There are no significant constraints in production volumes for Chinese production given their synthetic production techniques, unlike the union industry producers,” the EU said.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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