Irish companies are lagging behind firms in Germany, France and the Benelux countries in their preparations for EMU, according to a new survey.
The survey, carried out by RS Consulting on behalf of Cap Gemini, found some 65 per cent of German firms and 53 per cent of French firms considered themselves to be prepared for EMU. This compares with 50 per cent of Irish firms and 37 per cent of British firms.
The study was carried out among senior managers or directors of 131 companies in the Republic, Britain, Germany, Belgium, Netherlands, Luxemburg and France. Another finding of the survey is that only 26 per cent of respondents in all the countries expect the euro to change the purchasing patterns of customers. The majority of those questioned say the slow harmonisation of tax rates and duties across Europe, especially VAT, will mean the euro will have only a limited effect in this area initially. According to Mr Noel Crowley, EMU programme manager at Cap Gemini, the study suggests complacency among many European companies.
"This is evidenced, for example, in the fact that only 24 per cent of companies anticipate an increase in foreign competition, yet 42 per cent declare their intention to begin competing abroad," he said.
Overall the view among those surveyed is that EMU will mean greater moves into foreign markets by all firms. "Broader foreign activity is predicted by already established players because the absence of foreign exchange risks and hedging costs will make lower margins acceptable and open up the possibility of sales in non-premium locations," says the survey.
Despite this, 75 per cent of interviewees do not anticipate substantial numbers of foreign competitors to enter their own market in the next five years. The survey says there is one possible reason for this "complacency".
"Mergers and acquisitions may well be seen as a probable route to foreign expansion and a change of ownership of an existing competitor may not readily be recognised as new competition from abroad," says the survey.
On the subject of dual pricing, the question of finding the space to display two prices is seen as a problem.
