Mattress Market Segments Interchangeable, Don't Impact Injury Finding in AD/CVD Case, ITC Says

The International Trade Commission correctly found domestic industry was injured by imported mattresses in a set of antidumping and countervailing duty investigations, the commission said in a June 13 brief filed at the Court of International Trade. Despite arguments that the ITC failed to account for differences between mattresses-in-a-box and flat-pack mattresses, the commission said that it reasonably found the market segments interchangeable in AD/CVD investigations on mattresses from Cambodia, China, Indonesia, Malaysia, Serbia, Thailand, Turkey and Vietnam (CVB, Inc. v. U.S., CIT #21-00288).

CBP, which does business as Malouf Sleep, had filed the lawsuit to challenge the final injury determinations. In a brief filed March 27 (see 2204040060), CVB argued that the ITC didn't establish a connection between imports and injury to domestic industry. The ITC failed to establish that material injury to the domestic industry was “by reason of the subject imports” as required by the statute, CVB said.

The importer said that the commissioners failed to note that the U.S. mattress market is sharply segmented between markets for mattresses-in-a-box and flat-pack mattresses (FPMs), and didn't consider various market forces while performing its impact analysis. Competition between the two segments is highly attenuated, and the in-box segment has experienced market growth during the period of interest, while the flat-pack segment has been in decline for several years, which CVB says the ITC failed to note during its investigations.

CVB said that, "to the extent U.S. producers’ volume and market share appear to have declined ... those losses were limited to [flat-pack mattresses] ... because of shifts in consumer preferences." The relative decline in flat-pack mattress consumption is due to increases in the mattress-in-a-box segment of the market, not imports, CVB had said.

In response, the ITC said that it properly considered evidence concerning the two market segments, and reasonably found them to be "interchangeable," and that wholesalers, retailers or purchasers "do not focus on or prefer mattresses packaged in a particular way." The Commission said that studies have shown consumers prioritized price over packaging method.

In considering "all relevant economic factors," the ITC found that the imports at issue "significantly undersold" similar domestic products based on pricing data and purchase cost data showing that subject imports were lower priced, in comparisons, the brief said. The ITC said that CVB's complaint relies on the ITC's decision not to use "methodologies proffered by CVB," particularly segmented market analysis. However, the ITC said that it has a wide leeway to choose how it analyzes economic factors and that CVB has not actually argued against the reasonableness of that decision.