How to calculate anti-dumping measures calculation example. An effective way to conquer the market. Antidumping or Antidumping Measures

Some companies, in order to overtake their very strong competitors, are ready to use the most different methods. Among them is the artificial lowering of prices, that is, dumping measures. We propose to find out what to do if a competitor is dumping.

Dumping - what is it?

Every entrepreneur should know that dumping is the sale of goods and services at artificially low prices. Such prices are several times lower than market prices, and sometimes even lower than the cost of goods and services. The tasks of dumping are very different:

1. Penetration on new market . Sometimes artificial price reduction is an important condition for the transition to new markets.
2. Strengthening in new markets. In order to establish and securely gain a foothold in new places, it is important to apply dumping.
3. Squeezing out competitors. This is one of the best moves in the fight against strong competitors.

Often, dumping is carried out by the state or the company on the basis that in the future all losses will be reimbursed. It also happens that dumping is used as a one-time event, monetizing warehouse stocks and selling illiquid products. In some countries, artificial price reduction is considered a negative phenomenon, and they are combating it by applying anti-dumping laws.

Is dumping legal?

Such well-known concepts as dumping and price discrimination have a lot in common. Price discrimination is commonly understood as the sale of one product or service in different markets at completely different prices. different prices. In this case, the goods in one market may have a low price, and in another place of sale sold at inflated prices. This phenomenon is associated with the monopolization of markets and the use of high prices. Due to the fact that a certain company occupies a monopoly position in the market, it has the opportunity to sell products at inflated prices. This is how the company makes money.

Dumping pros and cons

Such a phenomenon as dumping has its advantages and disadvantages. Among the advantages:

1. Ability to introduce and promote products and services in selected markets.
2. Effective promotion of goods and services.
3. No additional investment required.
4. Favorably differs from other methods of attracting buyers.

It has such dumping cons:

1. Decreased performance of the company.
2. Downsizing of the enterprise.
3. The attitude of the professional community towards the company is deteriorating.
4. Possible negative attitude of consumers to the product.

Signs of dumping

Beginners and already experienced entrepreneurs understand that dumping is a method that promotes effective fight with competitors. Experts call such signs of this phenomenon:

1. Forgoing profits due to price cuts.
2. The quality of products suffers, as well as customer service.
3. Prices have become low not as a result of special marketing programs.
4. Price cuts are aimed at fighting competitors.

Types of dumping

There are such types of dumping:

1. Price- the price for an exported product is lower than the price for the same product in the domestic market.
2. cost- this is when a product can be sold below cost.
3. Monopoly- the company can occupy the entire market and sell goods abroad at a lower price than it sells on the domestic market.
4. Technological– sale of goods and services at low prices as a result of high labor productivity due to the use of modern technology.
5. Social– definition of price benefits.
6. Sporadic- importation of products in large quantities to the domestic market. Its goal is to reduce illiquid goods.
7. Deliberate– a special reduction in the cost of goods for export.
8. Mutual– sales of one product by several countries.

How to properly dump?

If a company needs forced dumping, it is important to understand how to dump and adhere to the following rules:

1. Approach the process of price reduction as creatively as possible. As an option, you can reduce the price not for the same product as that of a competitor, but for the one that brings the maximum income.
2. Every sale must have a reason and be limited in time.
3. It is necessary to reduce prices only in mature markets.
4. It is important to make sure that the end user can benefit

The consequences of dumping

Speaking about the consequences of this phenomenon, it is impossible not to clarify why dumping is dangerous:

1. Decreasing profitability.
2. Customers begin to choose products where it is cheaper, thereby “twisting the arms” of sellers.
3. Sellers get confirmation that price is the most important thing for buyers. Later, employees will not be easily persuaded to work with products that do not have a cost advantage.

How to deal with dumping?

Sometimes, in order to defend your "place in the sun", you need to fight against the dumping of competitors. We offer valuable advice for those who want to win it:

1. Mask prices. You should install the one that suits you average price for a product or service. Products Low quality can be sold at lower prices, and average prices should be set for goods of average quality. As for the best goods, their prices should be high.
2. Create package offers. An example would be mobile operators who sell not individual goods, but service packages.
3. Schedule a temporary price reduction promotion. At the same time, it is necessary to clarify that certain time prices will stay the same.
4. Make goods more valuable. To do this, it is necessary to reduce prices for a certain time. During this period, buyers must be sure to say that the products are much better and more valuable than those of competitors.

Dumping - the sale of goods by a company or enterprise at a reduced price below the cost level. This unacceptable method of price competition is used to support local producers and oust market competitors. As part of protecting business and fair competition, the state is developing anti-dumping measures.

Anti-dumping measures are a set of measures against adherents of unfair competition.

These anti-dumping measures were established in the current text of the Federal Law "On the contract system in the field of procurement of goods, works, services to meet state and municipal needs" 44 FZ of the Russian Federation.

Under the current legislation, anti-dumping measures on price restrictions are not provided. However, the market participant will be required to confirm good faith in accordance with 44 FZ when the price threshold is lowered by more than 25%. The customer has the right to require him to provide documentation confirming the impeccable reputation of the contractor or the representative of the selling company for a period of up to three years. At an annual rate this representative in 4 or more executed contracts, 75% of them must be executed without penalties and fines.

If the price is lowered from the initiative of the contractor, the requirements of the contract are fulfilled in full. If the contractor evades fulfilling the obligations under the contract, the customer is authorized not to accept the results of his work, to request operations to correct the defects. The indisputable right of the customer is the imposition of fines for shortcomings in the work and the termination of the contract unilaterally with the adoption of measures to enter the data of the negligent contractor in the RNP.

Anti-dumping measures are used against imports, exports and individual entrepreneurs. Administrative measures are allowed technical type. The exception is the customs tariff.

Article 37 "Antidumping Measures in the Course of Competition and Auction"

Article 37 of the Federal Law "On the contract system in the field of procurement of goods, works, services to meet state and municipal needs" approves the methods for applying anti-dumping measures and their ordering.

According to paragraphs 1 and 2 of this article, with a 25% understatement of the price of services under the contract, the contractor is obliged to provide documentation confirming his conscientiousness and diligence. More than 20% of the contracts for the annual period, which were not executed according to plan and with the imposition of fines and penalties, are a refutation of the contractor's statement about the customer's readiness to fulfill obligations under the contract in full ( paragraph 3 of Art. 37).

During the competition, the procurement participant is obliged to provide information on completed contracts, as part of anti-dumping measures. The data of four or more implemented agreements are submitted to them as an attachment to the application for participation in the competition. The Purchasing Commission is empowered to accept or reject the supplier's proposal. The decision to reject is communicated to the participant no later than 24 hours after the decision is made. If the supplier (contractor, participant) does not provide documentation confirming his good faith, the contract with the contractor is signed if he ensures the fulfillment of obligations under the contract in the amount exceeding the cost of the contract by 1.5 times.

When conducting an auction considered in item 3, information is provided by the contractor in conjunction with the draft contract, signed by the contractor. If this supplier becomes the winner of the auction, but refuses to provide information about previous contracts, or provides false information, actions are taken to recognize him as having evaded the contract. A protocol is drawn up and brought to the attention of the other auction participants within 24 hours, in order to carry out anti-dumping measures.

A special case is the implementation of a competition for the design of works in the areas scientific research, technologies and scientific consulting (item 7). The customer is authorized to set a lower threshold for the value of the work performance contract, which is lower than the maximum contract price:

• less than twenty-five percent;
• more than twenty five percent.

The documentation provided by the contractor as part of the anti-dumping measures must contain a letter of guarantee from the head of production with price and quality characteristics of the products, if the subject of the contract is:

• Medicines;
• Food;
• Medical equipment for emergency care;
• Fuel.

The provisions of Article 37 “Anti-dumping measures during tenders and auctions” of Federal Law 44-FZ do not apply to the purchase of medicines included in the list of essential medicines compiled and approved by the Government of the Russian Federation.

Application of anti-dumping measures under 44-FZ

Anti-dumping measures are fairly easy to apply in practice both in national and international trade relations.

The application of anti-dumping measures is feasible in accordance with WTO rules:

• If dumping threatens or deters industry in a country, WTO (World Trade Organization) are authorized to take anti-dumping measures;
• The legislation allows investigations to identify harmful dumping, as a result, anti-dumping duties are introduced;
• Certain rules and a set of measures are established for conducting research and taking anti-dumping measures;
• In the event that a certain anti-dumping measure is inconsistent with WTO rules, the exporting country may apply to the DSB with a proposal to eliminate the specific measure.

Application of anti-dumping measures to detect fraud, hiding under the guise of dumping may be next.

If the price maximum of the contract is from 15 million rubles or more, and the contractor offers a 25% lower price, then he must provide the following documentation:

• Guarantee of fulfillment of obligations under the contract, exceeding the initial stipulated request by 1.5 times;
• Information about previous contracts.

In the case of a price maximum of the contract from 15 million rubles or less, the procurement participant is required to provide only first paragraph from the previous two.

Download text FZ-44

The current text of the Federal Law "On the contract system in the field of procurement of goods, works, services to meet state and municipal needs" 44 FZ for a detailed acquaintance with anti-dumping measures can be downloaded at

The tenderer sooner or later faces dumping in the state order. The very phenomenon of dumping has existed in the field of tenders for a very long time, practically since the emergence of the institution of public procurement in Russia. The concept of "anti-dumping measures" in the state order appeared not so long ago, namely after the adoption of 44-FZ. In the law No. 94-FZ that was in force before 44-FZ, there was no such concept. At the same time, in practice, of course, there was dumping in the state order, but the state did not try to fight this phenomenon legislatively. What is "dumping" in the state order at the moment and what methods of combating this phenomenon are used? Let's try to figure everything out!

What is dumping in the state order?

The word dumping is borrowed from the English dumping, in translation dumping (selling at artificially low prices). Most often, dumping prices are below market prices and even below cost. To understand the nature of this phenomenon, let's take a look at the reasons for using dumping in tenders:
1. Entry of the supplier to the market, which is already divided and there is no other way to get into it.
2. Receiving an order from a specific customer in order to start cooperation with this customer in order to upsell related services, works, as well as enter into larger contracts.
3. Obtaining new contracts and obtaining the necessary qualifications to participate in major tenders, requests for proposals.
4. Playing according to the rules established by the state, where the price indicator is the most important and decisive in most cases in public procurement.

All these reasons have in common that the supplier, working at a loss or at zero, plans to make a profit or some kind of preferences in the future. In addition, do not forget about the Russian reality. On the this moment the state has created a public procurement system in which the supplier who offers the lowest price has more chances to win. This is true both for auctions and for competitions and other procurement methods. In the vast majority of purchases, the coefficient of significance is higher for the "Price" criterion than for other evaluation criteria.
Despite the fact that the state created the conditions for the development of dumping in the state order, it also created anti-dumping measures to combat this phenomenon. Let's take a closer look at this tool.

Anti-dumping measures under 44 FZ: what is it?

Dumping in 44-FZ means a reduction in the participant's price offer by 25% or more from the initial (maximum) contract price. That is, if the purchase limit is 1,000,000 rubles and the price offer of the participant is 750,000 rubles or more, then such an offer is recognized as dumping, if the supplier offers 750,001 rubles, then according to the law this is not dumping. Did you catch the fine line? One ruble or even one kopeck can affect whether the proposed price is recognized as dumping or not. Of course, this approach is formal and has an indirect relation to the market. The state order market has its own rules and these rules are 44-FZ. Let us analyze the anti-dumping measures under 44 fz in more detail.

Two situations are possible:

Option No. 1 Price (NMC) purchases of more than 15 million rubles.
In this case, according to part 1 of Art. 37 44-FZ, if the price of the purchase winner is dumped and reduced by 25% or more, then the customer concludes a contract with such a participant only after the winner provides the contract security with a coefficient of 1.5. But at the same time, the amount should not be less than the amount of the advance payment (if the advance payment is provided for in the procurement documentation and in the draft contract). That is, the procurement participant, offering a price of 25% or less from the NMC, must be ready to provide contract security 1.5 times higher in case of victory. The participant can choose to provide contract security either in the form of a bank guarantee or by transferring funds to the customer's account. Of course, most often the supplier chooses security in the form of a bank guarantee.
Option No. 2 Price (NMC) of the purchase is less than 15 million rubles.
In this case, the procurement participant has a choice:
- provide contract security with a coefficient of 1.5 (as in the option above)
- provide as part of the application documents confirming the good faith of the supplier as of the date of application.

IMPORTANT: documents on good faith must be submitted as part of the application for the competition, that is, before the winner is determined. If you participate in the auction, then such documents are provided along with the signed contract.

Information confirming the integrity of the supplier.

Consider what is meant by the "good faith" of the supplier" and supporting information.
The good faith of the supplier is understood as a confirmed fact of the successful execution of contracts with government customers. That is, such contracts must be completed and information about such contracts must be contained in the contract register.
In addition, the conditions for the limitation period of such contracts, the number and the presence or absence of penalties must be met:
Option number 1: 3 or more contracts within 1 year prior to the date of application, no penalties.
Option #2: 4 or more contracts within 2 years prior to the date of application, 75% of contracts without penalties.
Option number 3: 3 or more contracts within 3 years prior to the date of application, no penalties.
At the same time, the price of one executed contract must be at least 20% of the price offer of the participant in the procurement procedure.

IMPORTANT: Please note that contracts confirming good faith must be entered in the register of contracts. The fact that such a contract has been entered into the register must be verified independently. Contracts that are not included in the register of contracts cannot be used by participants as information confirming good faith. If the concluded contract is not in the register, then contact the customer to clarify the reasons. Entering contracts into the register is the responsibility of the customer, who also bears administrative responsibility.

In practice, information confirming good faith can be provided by the supplier in the form of a certificate with a list of contracts that meet the requirements of Option No. 1, 2 or 3, which we discussed above. In such a certificate, the procurement participant may also indicate a link to entries in the register of contracts. As confirmation of information, the supplier can attach printouts from the register of contracts, as well as copies of the executed contracts and acts themselves (the participant must submit a certificate, the rest is at his discretion).

In some cases, the customer may recognize information confirming good faith as unreliable if:
- the participant provided information on good faith on pending contracts
- the submitted information on contracts confirming good faith is not in the register of contracts
- the requirements for the number of confirming contracts, the term, the absence of a penalty have not been met (in accordance with options 1,2,3 discussed above)

This situation can have far-reaching consequences for the supplier with the entry of the participant into the register of unscrupulous suppliers, in case of participation in the electronic tender. If the customer reveals false information in an open tender, the participant will get off with the rejection of the application.

Anti-dumping measures under 44 Federal Laws and special cases.

Option number 1: If the Customer holds a tender for the performance of research, development or technological work, then the tender documentation may provide various criteria evaluation of applications with a reduction price of 25% or more from the NMC and less than 25% from the NMC. For example, a participant in such a tender reduces the price by 25% or more, in this case the Customer lowers the significance factor for the price offer and sets it to 30% instead of 60%, for qualification assessment the coefficient will become, for example, not 40%, but 70% . Thus, the application of the "dumping" participant will be evaluated in such a way that it becomes unprofitable to offer a lower price, since the participant in this case is guaranteed to score fewer points. These figures are given as an example, and it is natural that the customer must specify in the procurement documentation the significance factors and the conditions under which they will be applied.

Option #2: If the customer purchases life support goods (food, first aid supplies, fuel, etc.), then the participant, in addition to 1.5 times the contract security (or information confirming good faith), must justify the reduction in the price offer by submitting:
- a letter of guarantee from the manufacturer (with the price and quantity of goods)
- documents that confirm the fact that the participant of the procedure has the goods
- other documents

Option number 3. In some cases, anti-dumping measures cannot be applied at all, for example, in the case of the purchase of medicines that are included in the list of essential and essential medicines (such a list is approved by the Government of the Russian Federation). But the price medicines should be reduced by no more than 25% relative to the maximum selling price registered in accordance with the legislation of the Russian Federation.

Option number 4: Anti-dumping measures are also not applied if the customer does not establish a requirement to secure the performance of the contract. Establishing a contract security requirement is the responsibility of the customer, and in some cases the customer has the right not to establish contract security. In this case, the supplier does not need to provide a contract security, provide information confirming good faith as part of the application, or provide a contract security with a factor of 1.5.

Was there dumping?

We have analyzed in detail the anti-dumping measures under 44 fz, considered in all nuances the good faith of the supplier, ways to confirm good faith. And now let's ask ourselves how effective are these measures proposed by the authors of 44-FZ? The fact is that the reference point in determining the dumping price or non-dumping price is the initial maximum contract price (IMC). But, as the practice of the NMC shows, the customer can form and justify absolutely any price, that is, this is not a market price. If the NMC is 1,000,000, this does not mean at all that the real cost of goods, works, services is the same, that is, 1,000,000 rubles. Naturally, the customer is interested in the procurement procedure taking place. Therefore, it is beneficial for the customer to form NMC above the real cost. Such a situation with the formation of the NMC is also beneficial to the supplier, who, when participating in the purchase, has the opportunity to “throw off” the price and compete for the order. Thus, we can conclude that the supplier's price reduced by 25% or more from the NMC may not always be really dumping. The mechanism that is laid down in the 44-FZ to combat dumping cannot be called effective and thoughtful.

But it should also be noted that the customer himself can create conditions for combating dumping, for example, by choosing a procurement procedure in which it is possible to set a significance factor at a price of 30%. As practice shows, the customer himself is not always interested in fighting dumping, since in today's unstable realities lowest price contract is the most important factor when choosing a supplier.

It should also be understood that too low a cost can cause poor quality of the supplied goods, works, services. Customers and suppliers should try to search and find golden mean on this difficult issue.

Many companies, especially those operating in the field of trade, face dumping in their activities. People often talk about dumping and opposition to it at the state level as well. In this article, we will talk about what dumping is, what is its strategy, in what cases it is used, and what to do if dumping is against you.

Dumping is the sale of goods at a purposefully low cost in order to gain a larger market share and oust competitors. In most developed countries, dumping is considered unfair competition, but this does not prevent companies from periodically using it.

The term itself has been used since the 1930s. Some experts associate it with the British word dumping (“unloading”, “dumping”), others suggest its origin from the Norwegian dumpa (“it’s hard to fall”). One way or another, the meaning is conveyed in both cases: a sharp drop in prices.

Initially, the concept of "dumping" was applied to stale goods that were sold at a reduced cost, but later the term acquired a new meaning.

How is dumping different from regular price cuts?

Price cuts are not uncommon economic relations. However, promotions and other marketing moves, as well as cheaper goods due to lower costs or the use of new technologies, have nothing to do with dumping.

In the case of dumping, it is not about attracting the attention of customers to any product or maintaining profitability at a reduced price. No, here the goal is only a hard conquest of the market, including through conscious work at a loss for a certain period of time.

At the same time, the buyer only benefits from dumping - at least in the short term. As long as there is competition in the market, you can safely buy cheap goods. In the future, there is a risk of monopolization and price increases, but the end consumer cannot influence this process.

When to use damping

The main reason for using this controversial economic tool is the desire to occupy a niche in a new market - and preferably a fatter niche. If the market is competitive, the technologies used are publicly available, and the pricing policy of the participants is stable, to achieve a quick result, a new player can make only one knight's move: a sharp price reduction. This will allow to lure buyers, and in the future, even if the cost rises to an economically justified one, some of the customers will remain.

Dumping is also used to force competitors out of the market. This is how the federal trading network enters a small city, sharply reduces prices for the most popular goods, squeezes out local outlets, then begins to dictate its pricing policy.

Euroset example:

The third reason for dumping is “old school”: you need to sell an expiring product, or you are going to update the assortment and you need to clear the warehouse of illiquid assets. The price drops sharply - the goods are sold.

Types of dumping

From the point of view of the scope of dumping, there are two types of dumping:

Price dumping

More commonly used in foreign markets. A seller of products from one country at the expense of lower costs (for example, labor force or raw materials) exports its goods to other countries at a lower price than local producers can offer. Since the mid-1990s, such expansion has been carried out, for example, by China. Although Russian companies - in particular, metallurgical ones - did not disdain their advantages, entering the US market in the mid and late 2000s, in detail given example will be discussed below.

Within one country, price dumping is used by producers from regions where there is cheaper access to raw materials, materials, labor resources. Let's say retail chains due to higher volumes of transportation and more stringent conditions for suppliers, they are able to open their stores in remote areas, only slightly increasing prices compared to usual ones, which is impossible for local sellers due to high transport and other costs.

Cost dumping

The most aggressive type of dumping is when a company trades at prices equal to or even below cost to win the market for some time. To take such a step, one needs accurate calculations, otherwise you can burn out, not having time to force out competitors. It is companies that underestimate the cost of production that are under special attention of the antimonopoly services.

Forms of dumping

Constant dumping- sale of goods at cost (or cheaper) throughout the entire period of sale. This type of dumping is used for marketing purposes as part of promotions to stimulate sales of other goods. For example, furniture store can sell a sofa with a regular value of 30,000 rubles for 15,000, but subject to the simultaneous purchase of three more pieces of furniture at a regular price. Compensation for the dumping price of the “bait” product is included in the cost of other goods.

Mutual dumping- the sale of goods at a reduced price by two countries to each other. It can be the same product (and then we are talking about fierce competition for markets) or different (and then in some cases we can talk about mutually beneficial cooperation).

reverse dumping- selling goods on the domestic market at lower prices than for export to maintain domestic economic stability. A vivid example is gas, gasoline, electricity, and other energy resources, which are sold within the Russian Federation at prices below the world average. However, such dumping has a downside: exporters are motivated to sell goods at a better price abroad, due to which there is a shortage in the domestic market from time to time, and prices begin to rise.

Deliberate dumping- targeted actions to oust a specific competitor from the market in order to increase its share. Effective in a low-competitive market, does not work at all where one competitor can take the place of another.

"Pirate" dumping- targeted actions to destroy the business of all competitors in the market. The most irresponsible type of dumping, when the stability of an entire industry can be sacrificed for the sake of dominance in the market.

sporadic dumping- a short-term price reduction in order to sell off inventory surpluses or illiquid goods.

Eugene, owner of a youth clothing store

We sell clothes of youth brands, these are jeans, sweatshirts, pullovers, down jackets, etc. In our business, you never know what will go well and what will stay on the shelves. To maintain the assortment, we purchase a variety of products. Some of the copies may be stale and then we have to get rid of them at a price below the purchase price. Of course, we can hold such products for a year or two, maybe someone will buy them. But why? I'd rather clear the shelf for something more profitable, where the markup is 100-200%. These things will pay off with my head the losses that I will incur by selling illiquid assets at half price.

The consequences of dumping

Dumping can have different consequences, depending on how correctly the strategy of the dumping company was chosen, how competitors and government agencies reacted to it, how widely the campaign was conducted.

Positive Consequences

These can be in companies that achieve their goal and win the desired market share or crowd out competitors. A textbook example is the famous John Rockefeller and his Standard Oil company, which conquered region after region due to dumping prices, and in the second half of the 19th century became a monopolist in the US fuel production market. Equally successful was the strategy of Sony, which crushed its competitors in the US market, selling TVs at half the price of those in Japan.

The USSR did not disdain dumping either, which in the 70s of the twentieth century supplied Zhiguli, for example, to Canada at a price of 2600 rubles (about 5 thousand Canadian dollars). In the Soviet Union, then the same car cost 8400 rubles. Now it looks funny, but then the Canadians were not laughing. This country never managed to fully establish its own automotive industry - not least because of Soviet dumping. For 20 years, more than 300 thousand VAZ cars of the 6th and 7th models have been sold to Canada.

More modern example- the strategy of Nissan, which exported to Europe not only inexpensive cars, but also built factories there. Due to the more advanced technology of organizing enterprises at the end of the 90s and the beginning of the 2000s and competent dumping, the Japanese were able to increase sales tenfold, seriously squeezing out German concerns.

Negative consequences

In this case, the affected party may be one or more companies, or entire states.

Russia felt the impact of dumping in the early 90s of the last century, when goods from other states began to be delivered to the country, in many cases at deliberately low prices. The first victims of such dumping were domestic light and food industry who have yet to fully recover. Mechanical engineering, aircraft building, shipbuilding and other industries were hard hit.

Dumping hinders economic growth, since the general decline in prices in the market leads to a drop in the profitability and profitability of entire industries.

As far as individual companies are concerned, good example may be an attempt by Russian metallurgists to enter the US and EU markets on a larger scale. If in the mid-2000s this was possible through the purchase of foreign assets and the sale of Russian steel through them (and due to lower costs for wages and Russian metal raw materials turned out to be significantly cheaper than American or European ones), then by the mid-2010s, unprecedented anti-dumping duties (up to 240%) were introduced in the United States, and in 2017 the Russians were also “pressed” by the Europeans. This sharply reduced the profits of metallurgists and did not cause a crisis only because the difference in the cost of domestic and American / European Union products is large, and even a sharp increase prices did not cause the failure, although the market share of Russian companies in the US and the EU decreased several times.

Sometimes dumping leads to unexpected consequences for the economy, as evidenced, for example, by the story of manufacturers of wheels for railway cars. In 2016, the Eurasian Economic Commission set anti-dumping duties of 32% on the wheels of the Ukrainian company Interpipe, which were supplied to Russia and other countries of the Customs Union. The Russian OMK and Evraz, who asked for this, immediately after the reduction in the volume of Ukrainian deliveries sharply increased the prices for their railway wheels, taking advantage of the decrease in the share of the competitor. Now FAS is already investigating a conspiracy of monopolists.

An error in the calculation of dumping also quickly causes negative consequences. In 1997, the management of Vnukovo Airlines decided to use dumping rates to oust KrasAir and Sibir, their main competitors. As a result, before August 1998 economic indicators"Vnukovets" collapsed much below the expected values, and the jump in the dollar exchange rate finally finished off the company.

You can’t just take and lower prices - first you need to think carefully and calculate. The first step is always a marketing research of the most profitable commodity items from competitors. When these positions are identified, you need to decide on your own strategy. When determining it, several important factors:

• The price in the mind of the client is very often associated with quality. Therefore, the launch of a new product on the market is not easy to combine with dumping. Then it will be difficult to convince the buyer that he needs to pay more for a cheap product. Another thing is proven products. The low price for them is regarded by the client as a bonus, especially if it is not stipulated by any conditions (“buy three for the price of two”, etc.).
• Dumping is most often the lot of low price category. Therefore, if you want to sell a product or service with a high added value, one artificial price reduction is not enough, you need related marketing activities (or maybe dumping is not useful at all as an effective tool).
• Dumping almost inevitably leads to higher labor costs—in order to maintain turnover, more goods must be sold at lower prices. Sometimes this leads to an increase in the number of staff and reduces the efficiency of the organization. Customers want to buy inexpensive goods, but do not want to stand in lines or buy late.

Taking into account all of the above, we note a few rules of competent dumping:

• the approach to price reduction in each case should be individual. You can discount the product that brings the greatest profit to a competitor (and thereby damage him), or you can discount the one that brings you the biggest jackpot (and win a larger market share);
• dumping cannot be infinite: it is necessary to determine for yourself the time limits for trading at a dumping price;
• any dumping needs to be wrapped in a beautiful marketing "wrapper" - to announce promotions, sales, loyalty programs, etc., so that the client does not think that you are achieving your business goals at his expense.
• Before lowering prices, make sure that dealers do not take advantage of it; the end consumer should benefit - it is his loyalty that you need.

7 Strategies to Fight Dumping

If you feel that a player who is seriously dumping has entered your market segment, there may be several options for responding.

Strategy 1. Complaint to the FAS

Dumping in the Russian Federation is an act bordering on illegal, so it would be logical to contact the regional department of the Federal Antimonopoly Service. You can find the contacts of your OFAS. It is necessary to write a statement in which to describe in detail the actions of a competitor, to give arguments for the deliberate reduction of prices by him compared to the usual ones, to describe the consequences of such actions (a drop in the profitability of the industry, tax revenues). Separately, it is required to dwell on the evidence that we are talking about a planned act, and not about a one-time short-term marketing campaign.

It is difficult to prove the intent to undermine the position of competitors in the actions of a particular company; the FAS starts proceedings only in egregious cases. But trying is not torture. If dumping is proven, the FAS will issue a fine to the violator for unfair competition.

Strategy 2. Waiting for the collapse of a competitor

This is the easiest way, but sticking to the passive role only makes sense if you are absolutely confident in your position in the market and in the loyalty of your customers. Firms that are not prepared for a long struggle for a buyer often start dumping, and in the end they lose. When you feel that the dumping competitor has started to run out of steam and is already thinking about his gloomy prospects, you can offer to buy out his business on favorable terms for you and thereby expand your market share.

Strategy 3. Move to a higher price segment

If you feel that there is no way to fight a dumping competitor, try reformatting your business for a higher price segment. Master high value-added products, develop new packaging, conduct a good marketing campaign, focus on quality, exclusivity. Customers who are not interested in the segment of cheap goods will come to you - and here you will be reliably protected from dumping.

Strategy 4: Build partnerships

If the market is low-competitive, or you have personal contacts with the owners of dumping firms, you can try to negotiate a "non-aggression" - for example, you leave the segment that is most interesting to your partner, and he leaves you the segment where you get the most profit. This strategy works well when companies have a wide range of product lines, but the key goals are different.

Strategy 5. "Locomotive with a trailer"

Sale at a reduced price of the same product as that of a dumping competitor, but not by itself, but in a set with after-sales service, extended warranty, additional services. It is clear that all other positions, except for the main product, are sold at a price that can compensate for the promotional one. A variation of this strategy is package offers, which are so loved, for example, by mobile operators. Along with the vital 300 gigabytes of Internet you need, the package includes nth number SMS, the cost of which is calculated at a double price. And the trailer to the set number of minutes is billed for outgoing long-distance calls at a triple cost.

Strategy 6. Increase added value

If in the previous strategy the price of one product decreases, but the cost of related services rises, then in this strategy the cost of the main product remains the same, but the cost of related services decreases. Or they are included in the cost of the main product. For example, you are engaged in tire fitting. A competitor opens nearby and starts offering cheaper tire fitting. You, instead of reducing the price to the same level as a competitor, add to the price, for example, a coupon for free tire inflation for 6 months and free rubber packages. Some customers may go to a competitor, but other customers will appreciate the innovation, become your adherents and bring new customers through recommendations and word of mouth. After some time, the competitor will not be able to work with low margins or at a loss and will disappear from the horizon.

Strategy 7. Exit the market

This is not a strategy of struggle, but a way to solve the problem. If you understand that you cannot resist the expansion of a competitor, one of the reasonable options is to try to profitably sell your business to him and try your hand in another direction.

Anti-dumping measures of the state

State competitive purchases, which are carried out within the framework of federal laws No. 44-FZ and 223-FZ, are especially vulnerable to dumping. An unreasonably sharp reduction in the initial price for the sake of winning the auction often led to non-fulfillment of the contract: the supplier simply did not fit into the amount declared by him. Works in in full were not carried out, the goods were delivered inadequate quality- this caused damage to the customer, forced them to terminate contracts in court, waste time on new tenders. As a result, special legislative measures were taken to protect against unfair competition, which, although they do not 100% protect against dumping, still put a serious barrier in its path:

1. If the initial purchase price is less than 15 million rubles, if the participant reduces this amount by more than 25%, he must pay the contract security in one and a half size compared to the usual one (this amount is paid by the contractor as a pledge: if the work is not performed, they remain with the customer). Or provide confirmation of their solvency (information on the implementation of at least three government contracts in the previous year, the absence of penalties and fines on completed purchases).
2. With an initial price of more than 15 million and an attempt by a bidder to drop the price by more than 25%, there is only one option - one and a half security for the performance of the contract.
3. For goods necessary for normal life support (food, drinking water, heat, electricity, etc.), if the auction participant drops the price by more than 25% of the initial one, he must provide a letter of guarantee from the manufacturer indicating the selling price for product; confirmation of the availability of goods from the contractor, an agreement on the transportation of goods, licenses, certificates and other documents confirming the reality of the offer.

Another way state regulation dumping - measures taken within the framework of the Customs Union. At the request of domestic companies, a special commission recommends that the governments of the CU member states introduce one or another duty on imported goods. The duty can be restrictive (very high, its purpose is to completely block the access of goods to the country by economic methods) or protective, which leaves the opportunity for importers to trade, but strengthens the competitive position of local producers.

A purely Russian way to protect against unfair imports is federal law No. 165-FZ (“On special protective anti-dumping and countervailing measures when importing goods”). It provides for investigations into the sale in the Russian Federation of goods that damage the country's economy or impede the development of economic sectors due to the deliberate lack of competitiveness of domestic analogues. As a result of the investigations, anti-dumping duties are also introduced.

Dumping - is it good or bad?

Like any method of promoting a product or company to the market, dumping has positive and negative sides. Let's try to bring them into one table.

Conclusion

The term "dumping" in the economy is surrounded by a negative halo. And not by accident. This way of promotion in the market is on the fine line between fair and unfair competition. Its essence is that the price of a product or service is deliberately underestimated - in some cases below cost - in order to lure customers from competing firms, gain more market share and to force competitors out.

In contrast to the usual price reduction, dumping uses precisely a sharp, radical, contrary to all norms and customs, drop in the value of the goods. It is not justified by an increase in production efficiency or a decrease in raw material prices. This is a purely voluntaristic, conscious action.

There are many forms of dumping, each of which is used to achieve different goals: destroying a competitor's business, gaining a larger share of a market segment, reaching a favorable agreement with competitors, improving sales of related products, and so on.

The result of dumping can be like the conquest of a new market share, and the ruin of your own company - it all depends on specific conditions and competent planning of a dumping campaign.

If dumping is against you, you can use various strategies - from calmly waiting to leaving the market. The most popular counter-dumping strategies, promotions and package offers, appeals to the Federal Antimonopoly Service.

The state does not intervene too actively in the market struggle of economic entities (you have to carefully prove every suspicion of dumping), but it looks after its own interests seriously. As part of public procurement, protective measures have been established against contractors who win auctions due to a sharp price reduction. The FAS is also attentive to attempts to dump by foreign exporters.

In general, dumping has both pluses and minuses; experts advise using it with great caution and, if possible, using less radical methods of competition.

Video for dessert: 10 abandoned places that no one knows about

What is dumping? Honest methods of fighting for a market niche or an unscrupulous trick aimed at fighting competitors?

In economics, this concept has been used for a long time, but even now not everyone knows its definition, and even more so is not able to understand how justified this tactic is. Why do companies do dumping? And what is the meaning of this term?

What does the word "dumping" mean?

Dumping is one of the most striking manifestations competition in economics and has been widely used since the 1930s. The term is considered dumping is of English origin and means "unloading, dumping" , although it is often associated with the Old Norse word dumpa, which translates as "hard to fall."

Initially, the concept was used in relation to obsolete, low-quality goods that needed to be disposed of, but over time, the term lost its primary meaning and began to be used in the context of product prices.

What is dumping?

Dumping is the trade in goods or services at an artificially reduced value. Its main goal is to conquer the market and obtain economic advantages in comparison. Most often, dumping is used in international trade, although it is often observed within the country.


Many states consider it an unscrupulous tactic, so they use all sorts of tools to combat it, for example, reducing the volume of supplies to a specific market or voluntary import restrictions. But more often they fight against dumping by introducing anti-dumping duties, which do not allow the seller to drastically reduce the prices of their products.

What are the types of dumping?

In many developed countries, legislation distinguishes 2 types of dumping - cost and price. The first involves the trade in goods or services at a price below cost. Price dumping is defined as the sale of a product at a price below its domestic value.

In addition, there are a number of commercial forms of dumping, depending on its purpose and timing of application. In particular, sporadic is episodic trade at reduced prices, deliberate - the sale of goods in order to establish monopoly prices, mutual - counter trade between two states at low prices.

Why is dumping necessary?

There are a lot of reasons forcing enterprises to engage in dumping. Sometimes it happens that a new organization wants to enter the market and squeeze out competitors, as a result, it deliberately lowers the prices of its products to attract buyers.


Companies often dump in cases where they have accumulated large volumes of illiquid goods in their warehouses that need to be sold. Also, dumping is expedient if overproduction occurs in any region or the level of sales decreases.

An example is the situation in the 1980s, when goods from China and Turkey flooded into the republics of the former Soviet Union. In an effort to gain a foothold in the new market, the sellers of these products deliberately underestimated prices, as a result, domestic goods lost their competitiveness, were partially replaced, and local producers lost their production capacity.

Despite the fact that dumping has many negative aspects in relation to market participants, buyers only benefit from it. Ordinary people get the opportunity to buy products at low prices and thereby spend less of their savings.

How is dumping different from regular price cuts?

Not all low prices can be considered as dumping. Sometimes a decrease in the cost of products is associated with a successful marketing campaign, a decrease in production costs or the cost of providing trade.


Dumping differs from regular price cuts in that when using this tactic, companies do not think about the quality of their products or services and voluntarily abandon the normal level.

If, as a result of a marketing program or cost reduction, prices still remain above cost, then with dumping they can fall below production costs.