Retailers count cost of euro

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The Independent Online
The next stage of the campaign by UK retailers to deflect the worst damage of a single currency begins at a meeting in Brussels on Wednesday.

Martin Bangemann, the European Commissioner for Industrial Affairs, and three fellow EU commissioners will meet representatives of leading European retailers. The UK will be represented by Marks and Spencer's deputy chairman and joint managing director, Keith Oates, and its finance director, Robert Colvill.

Their mission is to advise the commissioners of the potential pitfalls retailers face from monetary union.

Last week, a report claimed the cost to European retailers could be as high as pounds 22bn. British retailers alone may have to foot a pounds 3.5bn bill to meet the demands of a single currency.

Eurocommerce, the Europe wide retailers group, which produced the report, warns that every effort must be made to minimise the costs of transition.

Last week, Lord Blyth, chairman of Boots, spoke about the threat posed by the implementation of monetary union, if done in a poorly conceived fashion.

Alistair Eperon, a director at the chemists chain, says EMU is not seen as bad in itself. "We need to ensure the commission recognises all the options available to it, and we must make sure it works," he said. He adds the current situation is similar to John Major's stance on monetary union. "It is not yet clear what the benefits to retailers may be." For Boots, he says, with significant business across Europe in over-the-counter pharmaceutical products, "one has to assume EMU will simplify transactions".

He also said that for monetary union to work, the most pressing need was for other barriers to come down first - such as different labelling regulations across member countries.

Marks and Spencer is one of the few retailers to have produced a detailed breakdown of the costs of a change over. It says implementing a conversion to euros could cost it just pounds 10m in additional costs. That, however, is its lowest estimate and assumes the changeover follows its favoured approach - a gradual change over a couple of years. If the EU took a "Big Bang" approach and insisted on overnight conversion, the cost could be as high as pounds 100m.

But others disagree. Kingfisher, the Woolworths to Superdrug group, would prefer a short-term introduction phased in over six months or so. A spokesman said a long transition period would cause Kingfisher lots of problems. "You would have to run two systems for everything."