Not all Finns able to take advantage as euro climbs to new high against the dollar

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The US dollar sank to new lows on Wednesday when the euro broke through a psychological barrier and soared to USD 1.504.
      However, not all Finnish consumers are able to take advantage of the record low dollar, as many retailers selling US consumer goods make their purchases in Europe in euros.
     
These days, for example, most clothes, even US brands, are manufactured in Asian low-cost countries. From there they are transported to Europe where they are distributed to retailers through importing companies.
      "We make nearly all our purchases in Europe and the deals are made in euros. Apple brings the goods into Europe from China, and the importing company in Europe sells them to retailers, including us", reports Frans Saxén who is in charge of the Humac retail shops, selling Apple products in Finland. Humac operates 14 Apple Premium Reseller retail shops throughout the Nordic countries.
     
On the other hand, transferring the effects of the weakening of the dollar to consumer prices is not such a simple matter.
      For example, the Apple iPod Classic costs USD 249 (EUR 168) in a US Apple Store, while the same product costs EUR 269 at a Humac store in Helsinki. An iPod Touch costs USD 299 (EUR 201) in the USA, while in Finland it carries a price tag of EUR 309 at its cheapest.
      Saxen points out that in Finland the price also includes the performing right royalty to composers, lyric writers, and music publishers.
      Some items are strikingly, even alarmingly more expensive in Finland. One example is a pair of Levi's Red Tab jeans, which can be had in the U.S. for as little as 49 dollars or EUR 33, but will come with a price-tag in excess of EUR 120 in Finland.
     
In practice, the Finnish consumer could best benefit from the weak dollar by travelling to the USA and making purchases there in dollars. At present, electronics and clothes are especially cheap, while tourists are allowed to import purchases worth EUR 175 into Finland from the USA without any customs clearance. The temptation is high to exceeed this figure, and in the case of electronics items, it is hard not to do so.
      Another way to take advantage of the cheap dollar is to order goods on the Internet. When making online purchases one should use a US website instead of European webites selling US goods. One should also bear in mind that when purchasing online, one has to pay the freight and postage costs, too.
     
Thanks to the favourable exchange rate, gasoline and heating oil are today cheaper than they would normally be in Finland, however uncomfortable it might feel when filling up the car.
      "Gasoline is very expensive these days, but if the dollar were not so cheap, it would be even more pricey”, notes Ilkka Lehtinen from Statistics Finland.
     
There are other niche-gains to be had in the motoring field. Those people who buy and restore old American cars now find they can order spare parts direct from the States for very reasonable prices.
      Actually driving the vehicles in the era of gasoline at EUR 1.40/litre may be a different proposition.


Previously in HS International Edition:
  Cheap dollar could lower clothing prices at H&M outlets (1.12.2004)
  US subprime lending crisis felt in Finland as well (15.1.2008)

Links:
  Humac
  Statistics Finland

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