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ELMSFORD, NY, May 28, 1996 -- In a new filing submitted today to USTR, Fuji Photo Film exposed Kodak's allegations of price fixing in the Japanese market for what they are -- fabrications that contradict Kodak's own public statements.
"The best evidence against Kodak's charges is Kodak's own past statements," said Fujifilm lawyer Bill Barringer. "Repeatedly over the past 10 years, and even since this Section 301 case was filed, Kodak representatives have said that Kodak was not going to compete on price in Japan, and that price competition was irrelevant to success in the Japanese market. How could price fixing -- even assuming it existed -- be a problem if Kodak has not been trying to compete on price?" A summary of Kodak's past statements is attached.
"You don't even need to read Fujifilm's arguments to see that the facts in this case are disputed," said Barringer. "Kodak's own contradictory statements are enough to prove that. Only a neutral fact-finder will be able to sort out which Kodak to believe -- Kodak then or Kodak now."
Fujifilm's latest submission shows that, contrary to Kodak's claims, price competition is alive and well all over Japan. "Low priced multipack film now makes up roughly 40 percent of the market," Barringer said, "and private and dual brand film at rock bottom prices is available in over 10,000 outlets in every prefecture of Japan. These facts, which Kodak does not deny, are totally inconsistent with the massive price fixing conspiracy that Kodak alleges."
"Kodak's problem in Japan isn't price fixing conspiracies," Barringer said. "Kodak's problem is that it has refused to compete on price aggressively and do the other things it takes to succeed. Now Kodak wants the U.S. Government to hand it market share that it hasn't earned."
KODAK vs. KODAK
Kodak now claims that it has been cutting prices aggressively in Japan for many years, only to be stymied by a massive price fixing conspiracy that keeps retail prices high.
Kodak used to tell a very different story. Here are repeated statements by Kodak representatives over the past decade -- including after the Section 301 case was filed -- which make clear that Kodak has not been trying to undersell the competition.
- President [Kay Whitmore] ruled out the possibility of the company passing on exchange rate gains from the yen's appreciation against the U.S. dollar to Japanese consumers, in the term of lower product prices.
- Jiji Press Ticker Service
- August 26, 1986
- [C]ompared with cameras, the film price in Japan is too low.
- -Kodak Japan President Albert L. Sieg
- Nihon Shashin Kogyo Tsushin
- January 1, 1987
- Kodak Japan states that, "If we sell in Japan at prices lower than these, the products will be reimported to the U.S. and other countries, and Kodak's international price system will fall apart."
- Nikkei Business
- June 28, 1993
- [Kodak lawyer Alan] Wolff defended Kodak for not trying to steal market share by undercutting Fuji's prices, saying, "Price competition is just no relevant if you can't get through the door."
- Dow Jones/Japanse Economic News
- July 26, 1995
- Asked . . . whether Kodak, by lowering the price of its film in Japan, could have gained greater market share . . . Mr. [Ira] Wolf once replied that even if the price of a roll of film were lowered to 1 Yen, the lack of distribution would prevent any significant increase in film sales.
- Photofinishing News Letter
- August 21, 1995
You do not have to read Fujfilm's voluminous submissions to understand that the facts in this case are disputed: just reading Kodak's own contradictory statements is enough to prove that. Only a neutral fact-finding mechanism will be able to sort out which Kodak to believe -- Kodak then or Kodak now.
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Thomas H. Shay
Fuji Photo Film U.S.A., Inc.
Edelman Public Relations