07 September 2000 | David Arminas
Anglo-Dutch food and personal grooming products company Unilever is to "encourage" its suppliers to adopt the euro, but will not enforce them to use it.
Unilever has no specific plans on how it would encourage suppliers to adopt the single currency, but a spokesperson told SM the company would help any supplier to set up a Euro-capability if asked to do so.
Around 20 per cent of its business with UK suppliers is already conducted in euros. And, from this year, all internal and external accounting, including Unilever's annual report, will be in the currency.
The announcement follows a similar declaration from car maker Toyota last month, sparking reports of "euro-creep". British companies with large export markets want to pay their UK suppliers in euros, allowing them to pass the risk of fluctuating exchange rates.
The trick for suppliers in any industry is to learn to manage the currency risk, according to Peter Thorne, a director at Andersen Consulting.
Andersen, which analyses IT programmes, prices its services in several currencies, including the forerunner to the euro, the European Currency Unit (ecu).
"The new discipline for suppliers is taking the currency risk, and a company must look at the size of this risk," said Thorne.
"We have priced our services according to the need of the customers," he added.
In its latest survey of 500 UK businesses, the Association of Payment Clearing Services found that the number of companies setting up euro accounts has been rising steadily. By March 2000, there were 55,000 business and corporate accounts.
"We are certainly seeing an increase of euro accounts," said Margaret Soden, senior manager of EMU planning at financial services company HSBC.
Leaked government documents also show that departments are being asked to make sure that big IT projects include software that is capable of handling euro calculations.
"We are not talking politics, but talking business," said the Unilever spokesperson.
Unilever is one of a group of several large UK-based companies, including British American Tobacco and BAe Systems, which have been arguing that the UK should adopt the euro, and also donating money to the Britain in Europe campaign.