Transactions between retailers and suppliers will change from pounds to euros on January 1st 2001, well before consumers start to use the new currency, according to an initiative by the Food Drink & Tobacco Federation of IBEC. This is designed to familiarise consumers before the euro notes and coins are introduced on January 1st 2002. Subscribers to the code - the first such code to be launched in the EU - will also use posters, leaflets, shop window signs to inform consumers about the euro.
Retailers who work to the code, which is voluntary, are advised to provide a dual pricing system three months prior to January 1st 2002 and three months afterwards. The pound price will appear first, and the euro price will be second. However, the retail trade says dual pricing may not be feasible for variable weight and fresh products. The code is also designed to avoid the problems which arose following decimalization. Retailers then were accused of profiteering as they rounded up prices. That also contributed to inflation.
The code says that "no advantage will be sought at the time of currency conversion". In converting prices from pounds to euros, the official conversion rate which will come into effect on January 1st 1999 will be used. Under EU legislation, the conversion of prices into euros will require the use of a six significant digit conversion rate. "Rounding of the conversion rate will not be permitted in any circumstances," IBEC said. However, after this conversion, retailers will be able to round up or down. This, however, has to be to two decimal points which should not have an impact on inflation.
"We intend that this code will form a framework for self-regulation by the industry with regard to invoice pricing, currency display and conversion, and consumer information," said Ms Ailish Forde, assistant director of the Food Drink & Tobacco Federation. "Obviously consumer information and protection will be critical. The Director of Consumer Affairs has worked with us on this code and believes that this is the right way forward".
IBEC said it was confident that the code would work noting that it had similar experience in the area of consumer complaints where a code of practice among suppliers and retailers is monitored and administered by the Food Drink and Tobacco Federation of IBEC.
On invoicing, suppliers and retailers said a dual display system would not generally be necessary. "An indication of both currencies on the bottom line will suffice." However, price lists and catalogues will display prices in both currencies, on a product line by product line basis, where retailers find this helpful.
Those using electronic data interchange (EDI) will convert on January 1st 2001. However, only systems and procedures that are verified will convert. The code notes that the changes when implemented, will be on a total EDI basis so as to avoid piecemeal developments. Codes for other industrial sectors are expected to follow.
