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» Anti-dumping measures: mechanism of operation. What is dumping price?

Anti-dumping measures: mechanism of operation. What is dumping price?

The word “dumping” sounds like a gunshot in sales departments. The reason for refusing clients, a reason to refuse further development and participation in the project. “These guys don’t know how to stop in time, they are ready to work for free,” the sales department managers discuss the results of the last auction.

Dumping - what is it in simple words

Dumping is a method of competition when an organization sells goods, work, and services at prices below cost.

Let’s say the cost of a liter of milk is 18 rubles. When participating in an auction for the supply of dairy products, the winner is the company that declares that it is ready to sell milk for 10 rubles per liter. The price includes production costs, transportation costs, labor, taxes and other payments.

This way of doing business causes dissatisfaction on the part of competitors - we have to revise the pricing policy, look for and develop new markets, look for a new niche where competition is not very high.

The goal of any commercial organization is to make a profit. During strategic planning, the owner may decide to revise pricing policy and use dumping prices. Over the short term, the organization operates at a loss, gaining clients and gaining experience. Then prices rise and the company makes a profit.

In what cases can a decision be made to use dumping?

Occupy a niche

The organization enters another region where the market is divided between local players. Examples show that sometimes large federal networks household appliances, cosmetics, operators cellular communications won the trust of buyers by investing in large-scale advertising campaigns, dumping, making it clear that everything was offered for practically nothing.

Client's piggy bank

This technique is used by organizations that work in the B2B and B2G spheres. Unlike the retail segment, where it is important to maintain the illusion of “low prices,” the commercial and government demand segment has its own ideas about pricing.

Delivering a product, providing a service or carrying out work for a “fat” client means gaining trust, increasing your rating and taking a step forward. The price is reduced for the opportunity to display on the website thank you letter from a transnational corporation, place the logo in the “work experience” section.

Gold mining companies, oil and gas industry organizations, large federal government agencies They often purchase products from small and medium-sized businesses at very low prices.

Seller with affection

Some business connections are very valuable to sellers. Even realizing that the provision of services, the supply of goods at the stated prices brings a loss, the seller refuses to transfer the client to another company.

Unload the warehouse

Warehousing of goods is a separate expense item for the company. Sometimes the planning department stocks up on a certain category of product, which is sold very slowly. In some cases, it is more profitable to dump stale goods than to wait for better times. This tactic is often used by food manufacturers and is also common among software distributors.

Grab a piece

IN difficult times Small business owners have to dodge to ensure that their checking account has cash inflows. Analyzing for Last year, there is a noticeable tendency for prices to decrease by 50-70% for SMP organizations. As a rule, small young organizations with a turnover of up to 30 million per year dump.

Feed customers

In a saturated market, the promise that it could be even cheaper than now attracts retail buyers. A couple of years ago, a well-known online store of goods from China, entering the Russian market, collapsed prices for non-food products. Cheap souvenirs, clothes, shoes, toys, equipment and much more were delivered to Russian residents almost free of charge. Gradually prices increased, but buyers who came from European and American colleagues remained.

The decline in consumer activity primarily affects the service sector. The passenger air transportation market is no exception. A decline in GDP, a decrease in business activity, and a reduction in international flights led to the expansion of the aircraft fleet in the domestic market.

Video lecture about dumping: what it is and how not to fall into it:

Airline dumping is nothing new. To fill the plane, companies sell tickets at very low prices. This applies to popular destinations – flights from regions to Moscow. Airlines are suffering losses and are reducing their fleet. Mergers and acquisitions are happening. In September 2015, Aeroflot absorbed Transaero.

Types of dumping

  1. Over time, the decrease in value may be regular, or it may be temporary solution.
  2. Dumping can be done on the foreign market by changing the cost of goods on the foreign and domestic markets ( price dumping). You can also sell products below cost ( cost).
  3. By purpose:
  • the organization dumps products to avoid overproduction ( sporadic);
  • the company deliberately reduces the cost of goods, works, services ( deliberate, deliberate);
  • the cost of exported products is lower than the price on the domestic market;
  • partners sell goods at reduced prices ( mutual).

The cost of goods, works, and services during dumping is very low. And the consumer undoubtedly wins by purchasing goods at a dumping price. But at the same time, business profitability decreases, which leads to the reduction of enterprises, decreased income, and unemployment. As practice shows, organizations that survive in a crisis are those that maintain prices at the level of profitability without falling to zero.

Anti-dumping measures

All market participants recognize dumping as an illegal procedure. Therefore, states impose anti-dumping duties, and rights holder organizations - anti-dumping measures.

For example, in December 2015, the United States, following an investigation, introduced countervailing duties on steel imports. For Russian metallurgists the duty was 6%, Indian 4%, Chinese more than 200%. The only Russian company to which the duty will not be applied is Severstal, whose participation in dumping has not been confirmed.

Anti-dumping measures also apply to companies that take part in public procurement. And companies that own software products develop their own provisions limiting partners.

According to 44-FZ

In order to protect the Customer from unfair actions of the contractor, clauses on anti-dumping measures were included in 44-FZ. More than once, government customers (during the 94-FZ) were faced with the fact that the Supplier who won the auction receives an advance and disappears, or does not fulfill the terms of the contract. Since 2013, suppliers have had to prove their competence, legal capacity and integrity.

There is only one criterion for selecting the winner of the auction under 44-FZ - a low price. If the cost of the original NMCC decreases by more than 25%, the following measures are applied:

  1. if NMCC exceeds 15 million rubles, it is necessary to provide contract security *1.5;
  2. with NMCC less than 15 million rubles, the following options are possible:
    • increase in contract enforcement by 1.5 times;
    • while maintaining the original amount of security, information confirming good faith and competence must be provided (similar contracts).

If the subject of the contract is food products, medicines (except for the list of vital and essential drugs), means for providing emergency and medical care, petroleum products, then the supplier is obliged to justify the contract price. If information is not provided, the company is included in the RNP as an unscrupulous supplier.

Article 37 reduces the risks of government customers, but does not eliminate them. The number of unfulfilled contracts, legal proceedings, the list of companies included in the RNP, the quality of services provided (road repairs, repairs, etc.) indicate the need to revise the criteria for selecting a supplier.

In IT

Leading IT companies and business software developers have also developed their own system for combating dumping partners. Currently, all software has recommended prices; selling software at a reduced price is considered dumping.

The exception is boxed products for retail customers. Retail prices are strictly regulated, but when a version of a product is discontinued, the remaining stock is sold out of the warehouse “to zero.”

Violators are subject to penalties in accordance with internal regulations:

  • deprivation of the right to supply and support the client;
  • deprivation of partner status;
  • penalties in the amount of 10 (30,100) times the amount of the violation.

Despite the anti-dumping measures introduced, when analyzing procurement activities government organizations you can see a significant deviation from the price list.

The concept of “for price” - special kind dumping, common in the IT sector. Depending on the status of the client, the status of the partner and the proposed transaction, the development company agrees on the amount of going beyond the price limit. Thus, for large deliveries of anti-virus software, the “price price” can be up to 30%, which in this area is a very large indicator.

conclusions

Dumping in the short term may become good tool to establish connections, gain a base and experience. It is worth considering that a number of clients who came to the organization because of the low cost are unlikely to remain when prices rise to normal levels. Regular dumping is a sign that the sales structure requires adjustment.

Video about dumping in the mobile operator market:

Hello, dear colleague! Today's article will talk about anti-dumping measures, as well as the effectiveness of their application. These measures are aimed at reducing customer risks due to artificially low prices during competitions and auctions. In 44-FZ, anti-dumping measures are regulated by Article 37, and when purchasing under 223-FZ, they can be established by customers in the Procurement Regulations. We will talk about all the nuances of using these measures below in this article.

1. Anti-dumping measures under 44-FZ

The concept of dumping

Dumping(from the English dumping - dumping) - sale of goods (works, services) at artificially low prices.

It's no secret that contracts with artificially low prices are mostly fraudulent. The dumping procurement participant receives an advance payment (if any), but the work remains unfulfilled. In addition, dumping contributes to a general decline in the level of work (services provided) and the quality of supplied products.

However, as practice has shown, dumping is resorted to not only by scammers or fly-by-night companies, but also by completely decent organizations. And the reason for such actions is obvious - the lack of proper experience and qualifications for healthy competition.

Dumping scheme “Taran”

It is quite difficult for young organizations, as well as newly founded individual entrepreneurs without work experience, to participate in government procurement. Therefore, dumping for “newbies” has been and most likely will be the only working tool in competition for a long time. The previously effective 94-FZ did not provide for anti-dumping measures, so cases of a serious decrease in the NMCC during trading occurred quite often. The favorite scheme among careless suppliers was the so-called “Bram” scheme.

Let me briefly recall the meaning of this diagram. Typically, three organizations were involved in the conspiracy. The first participant, who was supposed to win the auction, took the first step with a slight reduction in price (0.5-1% of the NMCC). Then two other participants entered the game, knocking down the NMCC of the contract as quickly as possible until the submission of price proposals by other participants would be pointless. Then, when considering the second parts of the applications, the applications of these participants were rejected, because they knowingly attached incorrect documents. And the winner was the participant who managed to make a price offer with a minimum step.

What anti-dumping measures are provided for in 44-FZ?

With the advent of 44-FZ, the situation changed in better side, but, in my opinion, very insignificant. So, what anti-dumping measures appeared in 44-FZ?

According to Part 1 of Art. 37 44-FZ, if during a competition or auction NMCC is more than 15 million rubles , the contract is concluded only after such participant provides in the amount exceeding 1.5 times the amount of security for the execution of the contract specified in the documentation for the tender or auction, but not less than the amount of the advance (if the contract provides for the payment of an advance).

Those. if the NMCC is more than 15 million rubles, the procurement participant, when signing the contract, is obliged to provide one and a half times the security for the execution of the contract.

According to Part 2 of Art. 37 44-FZ, if during a competition or auction NMCC is 15 million rubles or less and the procurement participant with whom the contract is concluded is offered contract price, which is 25% or more lower than the NMCC , the contract is concluded only after such participant provides security for the performance of the contract in the amount exceeding 1.5 times the amount of contract performance security specified in the documentation for the tender or auction, or information confirming good faith such participant on the date of filing the application.

Those. if the NMCC is up to 15 million rubles, the procurement participant, when signing the contract, can provide a choice of:

— or one and a half times the contract’s performance;

— or documents confirming the good faith of such a participant.

For which purchases are anti-dumping measures applied?

Many procurement participants mistakenly believe that anti-dumping measures apply to absolutely all procurement procedures, including and. According to Art. 37 44-FZ anti-dumping measures are applied ONLY to and .

A procurement participant can confirm his/her integrity by providing information about completed contracts for a certain period of time before the date of filing an application for participation in a competition or auction:

When conducting competition the specified information must be presented as part of the application (part 4 of article 37 44-FZ), and in the case of auction— provided to the customer along with the signed contract (Part 5, Article 37 44-FZ).

Revealing the unreliability of the information provided in the case of a competition leads to the rejection of the application, and in the case of an auction, it leads to the recognition of the participant as having evaded signing the contract.

What to do if your contract information is not in the registry?

If a contract has been concluded with the customer, but there is no information about the contract in the register, you must first contact the customer to find out the reason for the absence of an entry in the register. For failure to provide or untimely provision of information about the conclusion of a contract and its execution, the customer is subject to administrative liability.

Special cases of application of anti-dumping measures under 44-FZ

1. If a competition is held to carry out research, development or technological work, the customer can install different meanings criteria for evaluating applications with a price reduction of up to 25% and over 25% of the NMCC (Part 7 of Article 37 of the 44-FZ);

2. If goods are purchased for the normal life support of the population (food, emergency supplies, medicines, fuel, etc.), in addition to the usual anti-dumping measures (one and a half times the contract performance or confirmation of the procurement participant’s good faith), the participant must also justify the price reduction by provision to the customer (Part 9, Article 37 44-FZ):

  • a letter of guarantee from the manufacturer indicating the price and quantity of the goods supplied;
  • documents confirming the availability of goods from the procurement participant;
  • other documents and calculations confirming the ability of the procurement participant to supply goods at the proposed price

3. According to Part 12 of Art. 37 44-FZ anti-dumping measures are not applied if, during procurement medicines, which are included in the list of vital and essential medicines approved by the Government of the Russian Federation, the procurement participant with whom the contract is concluded offers the price of all purchased medicines, reduced by no more than 25% relative to their registered price in accordance with the legislation on circulation medicines maximum selling price.

As you can see, with the advent of Federal Law 44, the requirements for procurement participants resorting to dumping have become more stringent. However, it is difficult to say that this has radically changed the situation for the better.

Firstly, those participants who used dumping before 44-FZ also continue to use it. Of course, this “pleasure” has become more expensive, but not so much that we have to give it up completely.

Secondly, those participants who, as before, have a sufficient level of qualifications and experience are unlikely to try to win an order solely on the basis of price.

Only a combination of factors, such as application security, anti-dumping measures, contract enforcement, fines and penalties, as well as the lack of an advance payment, cut off negligent suppliers from procurement. Those. anti-dumping tools are effective only in combination with the above measures, and do not give the desired effect when used separately.

2. Anti-dumping measures under 223-FZ

Companies that fall under 223-FZ carry out their purchases in accordance with the Constitution of the Russian Federation, the Civil Code of the Russian Federation, 223-FZ, 135-FZ, and others federal laws and regulatory legal acts RF, as well as the Procurement Regulations approved and posted in the Unified Information System (UIS).

According to Part 2 of Art. 2 223-FZ Procurement Regulations is a document that regulates all procurement activities of the customer and must contain procurement requirements, including the procedure for preparing and conducting procurement procedures (including procurement methods) and the conditions for their application, the procedure for concluding and executing contracts, as well as other provisions related to procurement.

This means that each customer independently develops its own Procurement Regulations, which prescribes procurement methods, the procedure for their preparation and implementation, incl. and applied anti-dumping measures. These measures may differ from those provided for in Art. 37 44-FZ.

P.S.: If you still have questions, ask them below in the comments to this article.



Why are goods sold at low prices, sometimes even below cost? There are reasons for this. There are several of them, and among the most common are the desire to attract a consumer audience, expansion of the sales market with the help of dumping prices, expiration of the product’s shelf life, and the desire to win a government contract. And finally, the last reason, but one of the most important - the desire to help out as much as possible more money in case of bankruptcy of a company. Dumping can be a very profitable tool when doing business, but such measures should be taken carefully, since the risks can be as great as the possible profits.

In this article we will look at several aspects at once:

Our task is not only to teach you how to correctly use such a concept as dumping, but also to calculate the risks, as well as to correctly understand what exactly deliberate underpricing is used for, and how to combat dumping.

Dumping is...

First you need to understand what dumping is.

Dumping is a method of artificially lowering prices for goods or services. The goal is always the same - to conquer as much as possible more space in foreign markets, of course. Dumping is also one of the most common ways to combat competitors today. But in this case he cites international price discrimination.

Why is dumping needed?

1. New markets for goods- the ultimate dream of any businessman, which means dumping can be used for this purpose. Moreover, dumping is used to capture the market not only by individual companies, but also by entire states. For example, by exporting agricultural products, steel and other goods. Dumping is used as a method of trade between states, often in order to support producers within a particular country.

2. When pushing competitors out of the market, companies use lower prices as the main method. And this is the second purpose of dumping. Moreover, competitors are being forced out, both existing and potential ones. At the same time, companies must clearly understand the potential risks and losses from dumping. Such miscalculations should help win more and more new markets. For more profit prices will have to rise to compensate for the losses. And you need to be prepared for this. In this regard, dumping is indispensable in the work of retail chains.

3. Dumping as a state policy. Dumping in public policy often used to reduce mortgage interest rates. For these purposes, specialized organizations are created for state basis. Of course, banks are also involved. The implementation of such programs is controlled by the state, as it allocates subsidies. Considering that commercial banks have to follow the trend of reducing mortgage interest rates, dumping in this area helps to significantly reduce mortgage interest rates everywhere.

4. Benefits of banks. Dumping can be used if a company or bank operates, including with government support. To attract new customers, moving them away from competitors, lower tariffs and rates are offered. This is also due to the fact that all state-owned banks and banks with state support have access to financial resources that are cheaper than their competitors.

5. Price differences. Dumping also happens when prices for the same or similar products in the foreign and domestic markets differ, and very significantly. An example is the price of oil or gas, which increases significantly when crossing the state border. However, it is worth considering that the opposite situation is possible. For example, loans abroad can and usually are much cheaper.

Types of dumping

As an example of the use of dumping, we consider only developed countries. And there dumping is divided into price and cost.

1. Price dumping is a comparison of the price for which goods or services are sold in the domestic and foreign markets. Price dumping will be used if the price for strangers is lower than for others.

2. Costly dumping – comparison of the price offered by the external market with production costs. If sales to others come out below cost, costly dumping is used.

3. Wholesale dumping - a type of dumping that does not take into account either the demand for products or the price factor when selling a large batch valuable papers or goods.

Price war is a tool

Specialists from a company specializing in the sale of wine note that wine in Tetra Pak packaging is a product produced according to standards. But at the same time, its price is lower than bottled. It’s the price that plays a role higher value than all other attributes of any brand. This is how a price war arises. But dumping is mainly used either by dying markets or by rapidly growing and developing ones. In a narrow niche, dumping is also possible, but only under conditions of high price elasticity of demand and due interest from buyers.

Dumping stands out:

Monopoly. It occurs in cases where an enterprise or an entire association has managed to become a monopolist within the country. Prices offered by countries are lower than those offered for their own goods within the country. This policy involves protecting the national bank so that goods offered on the domestic market do not displace foreign goods that are sold at more favorable and justified prices.

Technological. It provides better productivity to the company, which is achieved through the use of advanced technologies. As a result, lower prices are ensured.

Social. Dumping, used in this case, determines the price benefits that the exporting country receives due to low production costs. But this low level of costs is achieved under the condition of low social development and low standard of living.

Sporadic. Dumping, which implies a sale in the form of "seyla" international. This is price or cost dumping. These "sales" help to get rid of illiquid inventory. But this dumping is short-term, it does not disrupt market processes. In this case, anti-dumping measures are not applied and the ruin of competitors in this case is not the goal.

Deliberate. Dumping may be intended to deliberately get rid of competitors, gain their share of the sales market and thereby establish a monopoly on prices.

Constant. Dumping may not be short-term, but permanent and systematic. Such a total sale has lower costs. With such dumping, price variations are allowed, also on the foreign market, and less than on the domestic market. The origin of such dumping is market. And this does not lead to disruption of market processes, although competitors may feel pressure.

Back. Dumping, in which export prices are inflated compared to the domestic market. Such dumping is an extremely rare phenomenon. And it can be forced only by sharp fluctuations in exchange rates.

Mutual. Dumping can be used by competitors in equally. That is, counter trade between the two states is assumed at reduced prices with the same goods. it's the same a rare event. High monopolization in the domestic market.

Robber. This type of dumping is based on a long, constant and systematic sale for the sake of another type of dumping - cost dumping. This type is used exclusively to ruin one of the competitors. Products are sold at a loss, but the sales market is captured and monopolized. And the monopolist status subsequently allows tariffs to be increased in the future.

Non-market. This type of dumping is used when exporting from a country that has the status of a “non-market” economy.

Hidden. Dumping, in which a company uses a price reduction not to fight competitors by unfair means, not to increase sales. This includes, in particular, transactions to reduce the tax base. Importers decide to sell products at lower prices than those indicated in the exporter's invoices. This is the so-called tax optimization scheme. But such deals are only possible if the partners are 200% confident in each other.

Episodic. Dumping, which is considered the most popular and in demand. It is used to sell off excess inventories of goods at prices equal to competitors and equal to their own prices in the domestic and foreign markets.

Managing risks: 13 practical steps

Sales require different marketing solutions. This could be a tasting, indicating the correct name of the product on the price tag, a specific display of the product in the hall, etc. Stores often use dumping for the main product, while raising prices for additional services or related products and product groups.

Pros and cons of dumping

In this section we will look at all the pros and cons of using dumping.

Pros:

Introduction and promotion of your own product in any market, even with a strong position occupied by competitors.
Dumping does not require additional resources, which means they can be spent on promoting products more in effective ways.
Dumping does not require additional financial investments, which distinguishes it most favorably from other methods of attracting clients and consumers.

Minuses:

The company’s performance indicators are declining – profitability, profitability, etc. are falling.
The professional community is rarely on the side of companies that use dumping.
Buyers may develop a negative attitude towards products precisely because of dumping. Price for most consumers is an indicator of quality.

Customer greed can be used to attract them

Many companies justify low prices precisely because of the greed of their customers. So they try to attract more potential buyers, reducing prices. But if the quality of goods and services is high, the attitude is at the same level, then why not apply a policy of increasing prices.

A product priced above the market average will remain attractive to buyers, since additional services usually "sell" separately, and they cost even more. Analysts periodically conduct market analysis to find out which services are most important to customers and what they are willing to pay for them.

Adviсe

There are several tips that will help you promote your brand while using dumping.

1. There must be moderation in everything. Do not underestimate the prices of your own goods too much. Otherwise, transactions may be declared illegal in court. And these are extra costs, delays, etc.

2. Prepare in advance all documentary evidence that a price reduction is necessary. Especially if the price drops below cost.

3. Provide only reliable information when preparing primary documentation. Any information can be verified. If inaccurate data is revealed, any transactions will be declared invalid.

4. Any transactions between related parties must be excluded. Otherwise, unnecessary questions may arise and additional checks will be carried out. And this extra costs by time.

How to combat price dumping

A struggle is a struggle. Here, as in war, all means are good. But with one caveat - everything except illegal ones.

War to the bitter end

In order for this strategy to work, three mandatory principles must be followed:

1. Lower costs due to the compactness of the management structure;
2. A more stable position of the company in the market compared to its competitors;
3. Demand for goods and services, which directly depends on prices.

The dog barks - the caravan moves on

It is not necessary to react to the actions of competitors, including provocations. If you don’t know how to fight competitors’ dumping, don’t fight. This is quite effective if:

1. The company maintains a dominant position in the market. At the same time, less than 50% of the value of products is determined by price. In this case, there must be other values ​​in the goods or services for the buyer.

2. Confidence in the stability of all components of the value assessment on the part of consumers, which should be higher than that of competitors.

3. High loyalty of clients and consumers directly can lead to the fact that revenue will not change. But there is a high probability of the opposite situation. Sales volume will likely suffer, which will directly impact profit growth.

Divide and rule

Differentiated pricing with a division of offers into basic and premium ones is relevant for companies that are engaged in trade, but not in service. Additional options (service) should be provided specifically to the premium segment. All buyers should strive for it (get into it). At the same time, the cost of the base segment, that is, the cost of goods in it, should be quite comparable with the prices of competitors. At the same time, there will certainly be losses, but they can be compensated for by premium goods.

Asymmetry in response

The best way opposition – asymmetrical. It is the most labor-intensive, but also the most effective. In response to dumping, you can completely leave prices at the same level, but improve quality, include additional options etc. At the same time, it is necessary to improve key indicators. It is necessary to modernize production, introduce lean manufacturing technology, and use automated systems, including for document management.

Price wars are far from uncommon in a market economy. Today we will talk about dumping and when it is worth using it when doing business.

What is dumping

Dumping (from the English dump translation, to dump, dump) is the sale of goods and services at a price below the market price. Often sellers reduce prices so much that they sell goods at a minus price. Dumping is used to compete for the redistribution of the market, and dumping can also help to quickly increase trade turnover and generate more revenue.

Dumping is a kind of gambit in the world of marketing; today you lose profit, expecting to gain the entire market tomorrow. The entire calculation is made on the fact that the competitor will not withstand the price race and will simply leave the market. As a rule, the dumping strategy is used when a new major player enters an established market.

It is worth noting that dumping is prohibited at the state level. The World Trade Organization (WTO) provides protective mechanisms that a state can apply to protect its domestic producers. Although dumping is beneficial for the end consumer, it can cause significant damage to the country's economy, leaving people unemployed and depriving the state of tax revenues.

Types of dumping and areas of application

In the legislation of developed Western countries There are two types of dumping:

  1. Price dumping is when the price for a product exported is lower than the price for the same product in the domestic market. Manufacturers often try to get around this ban by introducing minor differences in the product.
  2. Cost dumping is when a product is sold below cost.

By dumping, a company can achieve completely different goals. You need to understand that reducing the cost is an extreme measure and no business will do it just like that.

Sporadic dumping

Sporadic dumping is a reduction in the cost of goods for quick disposal from excess stocks in warehouses. This situation may arise due to the fact that more goods are produced than they are consumed; stopping production may cost more than reducing the cost. It also often happens that the goods are left in the warehouse and its further storage will lead to financial losses.

Deliberate dumping

Intentional dumping is a reduction in export prices to force competitors out of the market. The main goal is to become a monopolist in the market. This type of dumping is not long-term and can ultimately lead to higher prices for the consumer.

Constant dumping

Constant dumping is the constant sale of goods below cost. This type of dumping often occurs to attract traffic and sell related products to the client. That is, study business.

Reverse dumping

Reverse dumping is when the price of a product in the domestic market is lower than its export price. Most often found in countries that supply energy resources. It may also be due to currency fluctuations.

Mutual dumping

Mutual dumping is countertrade between two countries of the same product at reduced prices. It is also rare in conditions of high monopolization of the domestic market for a certain product in each country.

Examples of dumping

Dumping has a rich history, and its consequences have been positive effect for the initiator, and negative.

Vnukovo Airlines

By the end of 1997, this company was one of the leaders in Russian market. But already in the summer of 1998 the company decided to win back the positions of Siberia and Krasair on southern routes. As a result, after just a few months, the air carrier did not even have the funds to refuel its planes. And a few years later the company went bankrupt, and its property went to the same Sibir. That is, we can say that the dumping factor here clearly did not play in favor of the initiator.

Sony

In the 70s, Sony entered the American market with its televisions, selling them 40 percent cheaper than in its own Japanese market. The government did not like such dumping methods, and the company was called to account. But here the manufacturers did something truly brilliant: they opened production in the United States and stopped importing from Japan. In the states, completely new models were produced, which did not give the American authorities the opportunity to compare prices. Thus, as a result of this dumping, the initiator company won, because it strengthened its position in the American market and maintains it to this day.

Nissan

There is a case of dumping in the auto market several years ago. At that time, Nissan actively located its production facilities in European countries. This led to the fact that the prices for their products became significantly lower and the company was able to sell cars at lower prices compared to importers from other countries. Such dumping of Nissan caused a wave of aggression and a number of lawsuits. But as a result, all charges against them were dropped.

Anti-dumping or Anti-dumping measures

Naturally, most states protect their domestic manufacturer and are trying by all means to fight dumping. The easiest way to anti-dumping is to increase duties on imported goods. Russia followed this path; thanks to high import duties, many manufacturers were forced to build factories in Russia.

There is also judicial practice to combat dumping. One of the most famous precedents was the case when companies from Japan, Mexico and Venezuela were sued in the United States for selling cement. The price of the product in the states was lower than the price at which companies sold cement in the domestic market.

To eliminate the negative impact of unscrupulous suppliers who deliberately lower prices for procurement results, law 44-FZ provides for anti-dumping measures. In this material, we will look at what it is when anti-dumping measures are applied under 44-FZ, and we will also give an example of calculation.

Many suppliers use various tricks to conclude profitable contracts. One of them is artificially lowering prices. To counter this, 44-FZ was amended and a tool such as anti-dumping measures was introduced. What it is, when such measures are applied, and how the calculator of anti-dumping measures under 44-FZ works, we will explain further.

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What is dumping and anti-dumping measures

In the previous law No. 94-FZ, such a concept as anti-dumping measures was not used. Previously, the winners in procurement were the participants who offered the most low price. It didn’t matter how much lower it was than the initial one. As a result, participants could collude and artificially lower prices. The process of selling a product at this price is called dumping.

Customers who entered into contracts with unscrupulous suppliers who were unable to supply quality goods or perform work properly, as well as other participants whose market prices obviously lost to the artificially low ones.

Two new tools against unscrupulous suppliers

We will show you more subtle tools that will help protect against dumping. Namely contractual protection and criteria protection.

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Companies that offered minimum prices, did not confirm their integrity in any way. They were not required to have certain resources or experience in similar deliveries. As a result, suppliers missed deadlines for fulfilling obligations, delivered low-quality goods, and, as a result, wasted money from the treasury.

Innovations appeared in the law on the contract system. . They mean a set of measures that prevent participants from artificially lowering prices during competitions and auctions. Anti-dumping measures under 44-FZ are not provided for when requesting quotations.

The application of specific anti-dumping measures under 44-FZ depends on the contract price. The participant may be asked to provide:

  • ensuring the execution of the contract in an increased amount;
  • confirmation of the company's integrity.

In Art. 37 44-FZ talks about at what contract value anti-dumping measures are used, what integrity criteria participants must meet, how to correctly confirm the reliability of a company, etc.

What does Law 44-FZ say about anti-dumping measures?

Anti-dumping measures, in accordance with Law 44-FZ, are applied if the participant offered in his application a contract price that is 25 percent or more lower than the initial one. Let's consider the specific application of anti-dumping measures under 44-FZ:

  • if the maximum contract price is 15 million rubles. and more, the participant is obliged to provide contract performance security one and a half times more than specified in the procurement documentation;
  • if NMCC - 15 million rubles. or less, the participant must either provide security one and a half times more than established, or confirm his good faith.

In Art. 37 44-FZ lists the information that a company must provide to confirm its reliability. This:

  • execution of three or more contracts without penalties within a year before submitting an application;
  • execution of four or more contracts within two years, 75% of which were performed without complaints;
  • execution of three or more contracts within three years without any comments.

Please note that the price of one of the already executed contracts must be 20% of the value that the participant offers in his application. The method for providing information varies depending on the supplier selection process. If this is a competition, information must be provided as part of the application; if it is an auction, information must be provided when signing the contract.

Anti-dumping measures for certain types of procurement

For some purchases, a different procedure applies. For example, when purchasing research, development or technological work, consulting services customers can set their own indicators of significance, criteria for evaluating applications, if the price offered by the participant is significantly less than the initial one.

The significance of such a criterion as the contract price for these cases is established in Art. 37 44-FZ. It is equal to ten percent of the sum of the significance values ​​of all application evaluation criteria.

Also separate rules exist for contracts, the subject of which is a product necessary for normal life support. This could be food, medicine, medical equipment. If the participant offered a price 25 percent or more below the starting price, he must provide justification for the cost, which may include a letter of guarantee from the manufacturer of the product, papers indicating the availability of the product in warehouses, etc.

Anti-dumping measures under Law 44-FZ are not applied if the price of drugs is reduced by 25 percent or less of their maximum selling price.

Anti-dumping measures calculator under 44-FZ

The service for calculating the amount of security, which serves as one of the anti-dumping measures, is provided by several websites. On Internet resources you can use the anti-dumping measures calculator under 44-FZ. You just need to enter the data:

  • supplier selection method (select from the list);
  • NMCC;
  • advance amount (if any);
  • benefits for participants.

The system itself will calculate how much you will have to pay as security.

Anti-dumping measures under 44-FZ: calculation example

It doesn’t matter which calculator you use - they all work on the same principle and are based on the norms of Art. 37 44-FZ. Let's give an example. The customer holds an auction. The contract price is 14 million rubles. Advance is not provided.

The calculator will give us the collateral limits that the customer can set. Let us recall that according to law 44-FZ, this can be an indicator ranging from 5 to 30% of the NMCC. In our case - from 700,000 rubles. up to 4,200,000 rub. Let's say that the customer settled on the number 700,000 rubles. Let's calculate how much the participant must provide as security:

700,000 rub. × 1.5 = 1,050,000 rub.

Let's look at another example.

Let's take the contract price of 16 million rubles. The customer is holding a competition. There are no benefits for participants. The advance is 10% of the NMCC.

Using the anti-dumping measures calculator, we obtain the limits of the amount of security. The customer can set in the procurement documentation a security of 5 to 30 percent of the NMCC - in our case, from 440 thousand rubles. up to 2.8 million rubles Let’s assume that the customer has set security in the amount of 160 thousand rubles.

The participant proposed in his application a price that was 26% lower than the NMCC - that is, 11.84 million rubles. As Article 37 44-FZ states, in this case we apply anti-dumping measures. As a result, the participant must provide the following amount as security:

160 thousand rubles. × 1.5 = 240 thousand rubles.