Washington Retail Insight

Trade Case Threatens Retailers’ Supply of ‘Absolutely Essential’ Cash Register Tape

By J. Craig Shearman
Washington Retail Insight
March 12, 2013

NRF is warning federal officials that U.S. retailers could find themselves without enough paper tape for their cash registers and credit card machines if a trade action against a German company is allowed to go through.

“Lightweight thermal paper is used in every cash register, credit card terminal and ATM in the United States and is therefore absolutely essential in retail store operations,” NRF Vice President and International Trade Counsel Erik Autor said in a letter to Acting Commerce Secretary Rebecca Blank. A shortage “would deal a serious blow to retailers as they struggle to revive their businesses in a weak economy.”

The Commerce Department is considering imposing a 75 percent tariff on paper tape made by Koehler Paper Group, a German company outside Stuttgart, in an antidumping case brought by Wisconsin-based Appleton Papers Inc. The companies are the two largest suppliers of the special paper tape used for receipts, each accounting for 40 to 45 percent of the U.S. market, or as much as 90 percent combined.

The proposed tariff would nearly double the price of Koehler’s product, making it unaffordable while leaving retailers without a replacement supplier, NRF argued. While tariffs have been imposed in the past, none has been higher than 6.5 percent.

“The likely consequence would be to price Koehler out of the U.S. market and hand Appleton an effective monopoly,” Autor wrote. “As a capitol-intensive industry, it would be virtually impossible for domestic (paper) producers to make up for a substantial decrease in supply within any reasonable timeframe. Therefore, significant shortages … are a very real possibility for U.S. retailers.”

NRF asked the Commerce Department to reconsider the proposed tariff and instead set a level “based on commercial reality” that is sufficient to address any legitimate claims “while avoiding such draconian results that will severely impact other American industries.” At 75 percent, the tariff would be “punitive” rather than remedial, NRF said.

While the proposed tariff is targeted at a foreign company, it could also impact U.S. jobs. The case has drawn attention from Representative Kerry Bentivolio, R-Mich., whose district is home to a company that slits and cuts large rolls of paper produced by Koehler into the small rolls used by retailers.

© 2013 National Retail Federation