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EXCLUSIVE: Exchange rate drop is forcing Eurozone importers to consider surcharges

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The current weakness of the Pound is prompting UK catering equipment importers to reassess pricing strategy.

As Sterling is almost reaching parity with the Euro, this is hitting UK catering equipment importers who bring products into the country from the Eurozone.

For instance, Universal Foodservice Equipment, which is the official UK supplier for Ali Group cooking equipment brand Baron, is having to consider its strategy carefully.

Universal MD Roger Flanagan detailed: “We are still in discussion with Italy [Baron’s HQ] and our clients about this issue.

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“Universal is the sole supplier of Baron in the UK and as such has a slight position of strength, as no one else can purchase from Baron here.

“However, we have medium margins to work with and at the moment the rate is eating into our profits. We are now at the point we will have to pass it on as a rate at time of delivery and payment as a currency surcharge.”

Universal is taking action, as: “We cannot guess what the rate will be day by day, so it’s the only solution to pass on such a surcharge to protect our company,” reported Flanagan.

“We were caught out in the financial crash of 2008/9 and we won’t be caught out again. It will be a difficult negotiation with our customers, some of whom may have different views.”

Elsewhere, a long term view has insured Exclusive Ranges against the worst of the exchange rate impact for now. MD Trevor Burke told Catering Insight: “Using a conservative currency pricing structure for the past year or so and enforcing a time limit on quotations has helped us to mitigate currency fluctuations. This is particularly helpful when managing the pricing for bespoke, one-off cooking equipment from brands such as Rorgue and Menu System.”

He reported: “Currently, we are honouring the prices that have been quoted to distributors for all cooking suites. We are in the process of finalising our pricing structure for individual appliances in readiness to launch our price list on AutoQuotes.”

However, Burke warned: “Once we have committed to producing a price list that may be in the market for a 12-month period, it may be more challenging to manage pricing if the currency rate changes too much.”

Nevertheless, he reassured: “We appreciate that the uncertain political and economic climate will not only affect the price of equipment through currency instability but may also cause the market to be a little more cautious when it comes to purchasing new equipment.

“To ensure customers benefit the most from their investment, we are continuing to add value by offering additional warranties on products, providing service contracts and maintenance checks as well as supporting operators to manage energy consumption to reduce overall running costs.”

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Clare Nicholls

The author Clare Nicholls

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