Grey market booms on weak pound


As the pound hit an all-time low against the euro last week, mobile traders said export business was booming with the declining economy and UK products becoming better priced for overseas customers.

The euro was trading at more than £0.81 on some foreign exchanges last week, with the pound also hitting a 28-month low against the US dollar.

Genuine Solutions managing director Bav Majithia said its customers in Europe were taking advantage of the current exchange rate.

He said: "Our stock is sourced in the UK, so European customers are able to take advantage of better rates. They’re as happy to buy from us as a distributor in their own country, because we can deliver in two days. The weakened pound has had a positive effect on us."

20:20 Mobile group chief executive Meinie Oldersma said, across the mobile market, trading to Europe from the UK was at an all-time high, because of the preferential pricing the exchange rate had created.

He also said the situation was "positive" for 20:20’s continental business units.

But he added: "Overall, it doesn’t affect us as a company that much as our trade from the UK into Europe is minimal.

"Our sourcing of products from Europe becomes more expensive, but we also try to keep this to a minimum."

Oldersma added box-breakers were taking advantage of the situation by unbundling and shipping products from the UK back to Europe.

Brightstar Europe president Rod Millar said the company’s market-by-market focus meant changing rates would have little effect – but the good news was it would reduce the amount of grey stock entering the UK.

Said Millar: "Given our stance against grey products, and because we don’t do any grey trading – we only buy from manufacturers in the country in which we are going to sell so we only deal in local currencies – exchange rates have little effect on us. It only affects companies who do cross-border trading."