Rather than risk losing that business, Mr Williams says he will comply - and then demand the same from his own suppliers. He will tell 1,200 UK companies to start charging him in Europe's new single currency for the headsets, microphones, cables and electronic components he buys, even though the UK has no plans to adopt the currency at its inception.
It is the latest evidence that even as the UK Government hesitates over whether to join European economic and monetary union, the business community has little choice. Trickle-down pricing demands are likely to leave British companies with all of the risks and few of the benefits of the single currency.
"By the time Britain has its referendum on joining the common currency, it may be too late. The euro will already be here," Mr Williams said. "We'll use sterling only when we absolutely have to. If suppliers say they won't quote in euro, they are potentially excluding themselves from our business."
With 11 countries expected to be founding members of EMU, the bloc will be big enough for companies to satisfy most of their supply needs in euros, without having to take on the currency risk involved in non-euro contracts.
That is bad news for UK companies at the bottom of the supply chain, since they will be exposed to the risk of a weak euro slicing into their earnings when euro-denominated revenue is converted into pounds. It is a well-founded concern as the pound has already risen 25 per cent against the currencies of its main trading partners since mid-1996, an advance the Bank of England blames on fears that the euro will be weak.
"What European company is going to want to buy in sterling when so much is priced in euros?" said John Ainsworth, chief investment officer at Hill Samuel Asset Management. "The UK may say it's not joining EMU, but actually the UK manufacturing sector will have to join EMU by the back door."
As well as risking alienating their buyers, British companies that resist switching to the new currency may also find investors shun their stock. If a company was not willing to price its products in euros, Ainsworth said: "I'd question the future of the company."
Canford is not the only company asking its suppliers to switch to the euro. ICI, Britain's largest chemical company, told more than 300 chemical suppliers that preference will be given to those that agree to price their goods in euros. The reason is that ICI is getting the same pressure from its buyers.
Auto and aircraft parts maker TI Group is also feeling the pressure. "Some of our large German customers have said they want to buy in euros," said Bill Laule, chief executive. "We will do what is right for the customer."
CK Chow, chief executive of car parts maker GKN, said he expected soon to be stamping a euro price tag on the constant-velocity joints and other parts he sells to UK clients including Rover, Ford and Vauxhall. Officials at smaller car parts makers Hall Engineering and Unipart Group said the same.
"You're not going to cease trading with someone because they insist on paying in euros," said James Lockyer, the treasury manager at Unipart.
For large UK companies expecting to be paid in euros by their European customers, it makes sense to try to shift their costs into euros as well, to limit the risk that a shift in the exchange rate between the pound and the euro will undermine their earnings.
ICI expects the switch to euros to save it a few million pounds a year, money it currently spends hedging itself against currency fluctuations. Somewhere down the line, though, a UK manufacturer will have to foot the bill for insuring itself against foreign exchange moves, with companies that are either at the beginning of the supply chain or lack the muscle to enforce euro-pricing from their own suppliers likely to suffer.
Some companies that currently do all of their business solely in pounds may find they quickly have to learn about hedging the hard way. "Hedging costs money," said Zafar Khan, an analyst at Societe Generale Securities. "It'll be another problem for the UK guys. In the least, they'll end up with a margin squeeze, and at worst, a loss."
MPs on the Commons Treasury Committee quizzed business leaders last week on how the introduction of the euro is likely to affect them. But the Government is sticking to its line that the UK should not join until it is clear whether EMU will work.
"There would be a greater dislocation if we joined now," said Labour MP Ruth Kelly, an economist and member of the Treasury Committee. "This way we have the chance to see if the euro is successful."
She said that having to deal with the euro is likely to prove useful for companies as "a good way of preparing for the transition" if the UK does eventually agree to join EMU.
As British companies wake up to the implications of the euro for business, they are warming to the currency. A December survey by the Engineering Employers' Federation showed that six out of 10 engineering companies support joining the euro, compared with two out of 10 two years ago. A spokesman for the federation said the change of heart was not surprising as engineering companies export 65 per cent of their output - and half of that goes to European Union states. "Our future is bound to be tied up with Europe," he said.Reuse content