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CITT 2005 Update – Procycle Responds

October 19, 2005 – Procycle Group Inc. president, Raymond Dutil, has stood by watching and listening as his company has taken plenty of criticism regarding the Canadian International Trade Tribunal (CITT) safeguard hearings, and now he’s ready to have his say on the matter. Dutil pulled no punches as he said the Canadian importers represented in CASBI are using the independent bicycle dealers as pawns.

“This safeguard is a battle between the Canadian manufacturers and the importers, but sadly the importers decided to put the pressure on the IBDs and the IBDs only have one of side of the story,” Dutil said in an interview with Pedal.

Together with Raleigh Canada, Dutil’s Procycle Group submitted the request for the CITT safeguard inquiry, saying it has suffered serious financial damage as a result of cheaper frames being imported into Canada.

All along the two companies have suggested they will have to lay off hundreds of employees if something isn’t done to help them stay competitive in the Canadian market.

When the CITT released its recommendation that a 30% surtax be applied to imported bikes with an estimated retail value of around $400, the country’s bike shops formed a new association and came out swinging at both Procycle and Raleigh.

“These two companies need to focus on making better bikes, not continually come back to the government for more trade protection,” the Independent Bicycle Retailers of Canada (IBRC) wrote in a press release.

When asked about it, Dutil was less than impressed with the criticism. “I would say that’s bull****. We own Rocky Mountain Bicycles and they’re made in Canada and exported to the US and Europe. Do you think IBDs would buy the brand if it wasn’t up to date? We have five different dual-suspension patents,” Dutil said. “It’s really bull**** because Rocky Mountain has really improved its products year after year. People are saying that our 2006 products are the best we have ever offered.”

He said his company simply isn’t on a level playing field with the other players in the global market. “It’s a bit hard to compete for us sometimes and that’s why we asked for this. We just want to be in a fair market,” he said.

Dutil added that the 30% surtax shouldn’t be entirely footed by the retailers. “The importers have the capacity to absorb some of it, but they’re threatening the IBDs saying it’s going to increase IBD costs by 30% because they [the importers] want to put pressure on the IBDs and scare them,” Dutil said. “At the end of the day, if for example an IBD purchases Miele bikes (made by Procycle in Canada), there will not be a price increase of 30%. It’s about time Canadian importers matched Canadian-made bicycle prices.”

Asked if he thought the Canadian government would rule on the side of Procycle and Raleigh, Dutil said it isn’t a slam dunk.

“I think it’s a difficult decision to make and politicians don’t think the same way we think,” he said, adding that he feels the recommendation is fair to all sides.

“Believe me, the tribunal really worked hard and made a recommendation to help the IBDs against the mass merchants,” he said.

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