BEIJING, Feb. 19 -- Chinese candle enterprises are ready to take legal action to protect their interests in the face of the European Union's anti-dumping investigation, sources said.

The EU said over the weekend that it has started an investigation to see whether candles imported from China, the world's largest candle maker, are being dumped.

Chinese candle enterprises have been preparing for anti-dumping accusations from as early as 2006, industry insiders said.

"We have already selected lawyers to fight the case," said Zhang Zhibiao, spokesman for the China Chamber of Commerce for Import and Export of Foodstuffs, Native Produce and Animal Byproducts, which also represents the Chinese candle industry.

The EU is the major market for Chinese candles. China exported over 44 tons of candles, valued at $300 million, in 2007, and half of it went to Europe, according to Zhang.

Chinese candle makers are no strangers to anti-dumping cases. The US in 2006 imposed a 108.3 percent anti-dumping tariff on candles from China. Many candle makers have since turned to other markets.

Most shifted to the EU, according to Liang Feiyong, manager of a candle company in Guangdong province. "If the EU finally slams duties on candles from China, many Chinese enterprises will go bankrupt," said Liang.

The candle industry in China, like many other manufacturing sectors in the country, are dominated by small and mid-sized companies.

Zhang, however, said that while preparing for legal actions, Chinese enterprises should pay attention to better quality and brand building rather than competing on the basis of low prices.

The EU's decision has also drawn concern from European enterprises. Many big retailers, such as Sweden's IKEA, import candles mainly from China. Once the anti-dumping tariff is imposed, costs will increase for these enterprises as well.