The Federal Government has backed a complaint jointly lodged by Kimberly-Clark Australia (KCA) and SCA Hygiene Australia, and is set to impose higher import duties on some imported paper products.

Home Affairs Minister Bob Debus has upheld allegations from the company that its premium Kleenex toilet paper made at its Millicent Mill has faced unfair competition from some imports.

Mr Debus recently announced his decision in the national press and the Federal Government Gazette.

The minister accepted the recommendations of the Australian Customs Service (ACS) which spent the past year probing the allegations.

He acted in accordance with the Federal Government’s Anti-Dumping legislation which aims to prevent imports being sold in Australia at prices which are cheaper than their country of origin.

As part of their inquiry, ACS personnel inspected the KCA Millicent Mill. The results of their inspection form part of the 99-page report which can be read in its entirety on the ACS website.

A similar complaint about price undercutting was lodged by SCA Hygiene Australia, which manufactures Sorbent toilet paper - a premium grade competitor to Kleenex.

KCA previously made a premium grade toilet tissue for Coles Supermarkets under the “You’ll Love Coles” brand.

Both manufacturing companies had complained to the ACS about Chinese and Indonesian toilet paper and alleged the imports have been subsidised, which is contrary to Australian law.

According to the two companies, they have suffered from loss of market share, price depression, price suppression, reduced profit and profitability, reduced return on investment and reduced attractiveness to re-invest.

They also allege that the situation has led to under-utilisation of production assets, increased inventory levels of like-goods produced by the Australian industry and reduced domestic revenues for premium and mid-range product lines.

Much of the Chinese and Indonesian toilet paper had been sold in Woolworths supermarkets under its in-house “Select” brand.

KCA’s corporate affairs general manager Ross Hearne said the Federal Government decision would provide greater job security for local KCA employees.

“We welcome the minister’s decision. It supports our claims of unfair competition in the market as confirmed by the ACS in this dumping case,” Dr Hearne said.

“We have invested over $300m in developing a world-class Australian tissue manufacturing business and we want to continue to maintain a level playing field for these operations.”

The higher tariffs on certain Indonesian and China imported papers took effect from December 31 which was
the date of the declaration by Mr Debus.

Woolworths had the option to appeal the minister’s decision within a fortnight of his declaration and has done so. The decision will now be probed by the Trade Measures Review Officer (TMRO) who will review the evidence in the coming 60 days.

The TMRO cannot overturn a minister’s decision. The officer can only make a recommendation to Mr Debus for the ACS to investigate and report back.