Euro ‘falls’ near $1, but European goods ‘pricey’

NEW YORK, April 6, (AP): Americans hunting for a bargain on a new Beemer, bottle of Chateau Margaux or Hermes handbag thanks to the sliding euro should put away their gold cards. European luxury goods sold in the US still carry luxurious price tags.

The European currency has fallen 10 percent against the dollar this year. In theory, car dealerships, department stores and other companies that sell goods from Europe could pass on the savings to their American customers, said Ira Kalish, chief global economist at Deloitte, the consulting and accounting firm.

“But what would be the point of doing that?” Kalish asked. Demand for anything made in Europe is so strong that they have little trouble moving merchandise. “From their perspective, it’s better to leave the price unchanged and pocket the profit.”

The euro has been in a long tailspin. Last April, it was trading just shy of $1.40. Since then, it sank as low as $1.04 in March before bouncing back to $1.10 on Monday.

In other words, you used to have to pay $1.40 to buy a single euro; today, you pay just $1.10.

So where are the bargains? There’s no reason to think that prices for Italian shoes and French red wines will fall along with the euro, analysts said. Part of the reason is that most European consumer products sold in the US aren’t aimed at most consumers. Armani, Hermes, and Prada cater to the affluent, selling well-made products as well as the perception of prestige and status. They have an image to maintain and slashing prices isn’t part of it, Kalish said. Loyal customers might consider it, well, gauche.

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In June 2014, Mezzan fully consolidated Kitco Group by buying the 49 percent held by the Oberoi Family, Kitco Group’s founding partners and the Group’s operators, while still retaining the partners as operators. The recent acquisition aligns with Mezzan’s focused expansion strategy of increasing the scale of operations in profitable ventures with proven track record.

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In September 2014, Mezzan obtained the distribution rights for Scholl’s, the renowned brand of foot care products. Mezzan Holding Highlights:

Distributes over 25,000 Stock Keeping Units (SKU), making it one of the largest operators in terms of SKUs, unit sales, market share, and in terms of share of revenues of total consumer spending in consumer categories served by the company

Operates in seven countries through 29 owned subsidiaries, and 7,500 employees

Active in various segments of the consumer staple industry supported by long-standing relationships with Johnson

“If a luxury product becomes really cheap, they might think, ‘Why am I buying it, then?’” Kalish said. “The high price makes it attractive for some people.”

Bill Earle, president of the National Association of Beverage Importers, said customers shouldn’t expect to see cheaper prices for French and Italian wines anytime soon.

Part of the explanation, Earle said, is that US importers pay well in advance for wines that often take years to age. With Brunello di Montalcino from Italy, for instance, the wine sits in an oak barrel for about four years before it’s ready.

“One way to look at it is, the earliest you’re going to see cheaper Brunello is in 2019,” Earle said.

But even then, there’s no guarantee that businesses will pass on savings to customers. Earle said a bottle of wine has to pass through layers of businesses before it shows up on the shelves - importers, distributors and retailers - and each business has its own costs. Because currency markets can be volatile, businesses are slow to cut prices because any savings could quickly vanish with a sudden swing in currency trading.

Doug Bell, a wine buyer for Whole Foods Market, also said he doesn’t think people will see a significant fall in prices for European wines. Any drop would start showing up with the 2015 vintage, and even then, he said, other factors, such as bad weather, could easily offset a currency move.

The only way people might benefit from cheaper European wine, Earle said, is if they’re “bringing it over on an airplane.” and Johnson, Olayan-Kimberly Clark, Reckitt Benckiser, General Mills, Arla Foods, Sara Lee, and many other leading brands and manufacturers

Serves over of 100,000 meals a day in Kuwait, Qatar, and the UAE through its catering business

Has a total of 130,000 square meters in food, beverage and FMCG manufacturing facilities in Kuwait, Qatar, the UAE, and Afghanistan

Leverages long-standing relationships with private and cooperative supermarkets

Vertically integrated into complementary business operations, including packaging, catering, contract services and logistics

Food Services customers include multinational fast food chains, airline catering services, and large food services companies.

Mezzan Holding incorporates 29 subsidiaries and is operationally structured into two primary business lines: the Food Business Line and the Non-Food Business Line. The company is the manufacturer and distributor of household brands such as Kitco chips and snacks, Country Rice, Khazan meat products, Al Wazzan Rice, Al Wazzan Canned Tuna, Aqua Gulf, Pillsbury, Green Giant, Sara Lee, Betty Crocker, and Tabasco. The company is also the exclusive distributor of Starbucks chilled products, Johnson & Johnson, Dettol cleaning products, Kleenex, Listerine, Pif Paf, Huggies, Clearasil, Neutrogena, Zyrtec, Tylenol, Olfen, Misporin, Gaviscon and hundreds of other products in Kuwait as well as Red Bull in the UAE.

Mezzan Holding is headquartered in Kuwait and operates in Kuwait, Afghanistan, Iraq, Jordan, Qatar, Saudi Arabia, and UAE.