Monitor duty is welcomed
EU directive removing import tax exemption could halt recent price slide
The channel may benefit from controversial European Union (EU) proposals to increase import tax duty on TFT monitors, according to resellers.
Computer monitors, including LCDs, are currently zero-rated for duty, but because many now have digital video interface technology and can be used as TVs, the EU Committee on Excise Duties wants to reclassify them.
Brussels aims to remove the exemption and slap on the 14 per cent duty that applies to TVs and plasma displays. This could be good news for resellers, according to John Turner, computers and displays business manager at distributor Midwich.
"Supply has outstripped demand and we have over-capacity of these computer monitors. The price has dropped by about £40 to £50 per monitor over the past four months. Resellers have a fixed margin so a price rise will see profits go up," he said.
John Sidwick, managing director of Maverick, echoed this view. "The slump in prices of LCD monitors has been horrific and hopefully this import tax will help stop the slide. If it continues resellers won't be able to run fast enough to maintain market value in their business.
"The import duty will raise margins for the channel, but it will only help with the higher value monitors, or 17in and over," he said.
Fritz Bolkestein, the EU commissioner behind the move, has so far not signed the directive. Manufacturers are concerned that he may sign it before he steps down at the end of October, according to Bob Raikes, chief analyst at computer display market consultancy, Meko.
All EU member states would have to comply and impose the duty.
"It is possible that [Bolkestein] will want to tie up loose ends. This duty will lead to a huge hike in the price of LCD monitors and does seem to be a political move. It is likely to end up in international courts with the EU and manufacturers fighting it out for years," said Raikes.