Greek debt crisis: provides 'opportunities to buy cheaper'

Will Green is news editor of Supply Management
13 July 2015

Buyers should be considering their sourcing strategy following the drama over a possible Grexit because “they may unearth some opportunities to buy cheaper”.

Denis Royer, managing director of Xchanging Procurement Services, welcomed the fact a deal had been struck to keep Greece in the euro, because it provided stability and certainty for businesses, but said currency fluctuations caused by the situation was the biggest risk and opportunity.

Royer said Greece’s exports made up less than 1 per cent of total eurozone exports. “The main risk for procurement is exchange rates, with the euro becoming even weaker against other international currencies,” he said.

“It depends where the buyer is placed. For those outside the eurozone they would have a stronger currency and therefore a more competitive landscape for any purchases in euros.”

Agreement was reached by Greece and eurozone leaders following marathon talks in Brussels at the weekend, and now the Greek parliament must pass a raft of bills covering issues such as pensions and tax before formal negotiations begin over a €35 billion (£24.9 billion) support package.

Royer said the manufacturing sector was best placed to take advantage of the situation, with the potential for cheaper raw materials and parts and intermediate and finished goods.

“There have been some currency changes so that is an opportunity for buyers to look at their sourcing strategies and to check they are leveraging the currency differentials,” he said. “They may unearth some opportunities to buy cheaper.”

ParcelHero said the UK bought $1.3 billion (£837 million) of goods from Greece last year, including $176.3 million (£113.4 million) of pharmaceuticals, $114.3 million (£73.6 million) of vegetable and fruit products and $102.9 million (£66.2 million) of dairy, eggs and honey.

Roger Sumner-Rivers, founder of the delivery company, said: “Higher shipping costs are just one of the implications of Greece’s potential departure from the EU and euro. It is to be hoped that a way forward can be found for Greece and the EU that does not lead to increasing costs to UK businesses seeking to trade with Greece.”

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