ZEG Expresses Concern About Dumping Duty For Shimano

COLOGNE, Germany (September 24) - ZEG Chairman Georg Honkomp has written a letter to the German Chancellor Helmuth Schröder, to express his concern about the effects of the anti-dumping duty which will in all probability be imposed on Shimano hub gears. The Chairman of Germany's and Europe's biggest buying association for independent bike dealers (IBD's) asks the Chancellor to use his influence with the European Commission to prevent the imposition of the duty. Honkomp expects that the duty will lead to a further weakening of the German bicycle industry when SRAM will get a monopoly position in Germany. When there is already a price difference of DEM 200 to 300 (EUR 102 - 153) between two similar bicycles from the IBD or from the big chain stores, a price increase on the most expensive part of the bicycle will create a bigger gap to be bridged by the advice and service of the dealer. Moreover, Honkomp expects SRAM to increase its prices. ZEG now orders already 70% of its hub gears from SRAM, but can only continue to do so when there is an alternative for the remaining 30%. Honkomp states that now already SRAM cannot cope with the increased demand for its hub gears, and that the production of bicycles with other-than-SRAM hub gears will shift to eastern Europe or the Far East because there the dumping duty does not apply to complete bicycles with Japanese hub gears. ZEG hopes that 'our children will be able to ride to school on safe bicycles.' Comparable letters have been written by Puky, the German manufacturer of children's bikes ("the children of Europe have been hit by a medium size disaster") to the Minister of Foreign Affairs Joska Fischer, and by Derby Cycle Germany to the leading German business daily paper Handelsblatt, who have been publishing on the SRAM-Shimano controversy.(OB)