Exporters need to price their goods in local currencies and speak their languages

The latest 3-month trade figures indicate once again the habitual British practice of pricing their goods in sterling rather than the currency of the country they are trying to sell to.

Thus the 2016 export figures for food and drink at £20 billion which Mrs Leadsom, the environment minister, revealed on 21st February, are larger than those of 2015, but actually the same as those in 2011-2013. If the exporters had priced in Euros, or dollars for goods they sold to the EU and USA, the last quarter of 2016, should have shown a 7-15% jump in value depending on product group (at constant volume) not the miserable 3-4% actually recorded. Actually the profit from the devalued pound sterling has gone mostly to agents in the customer countries which some UK exporters habitually use.

There is a general point here. The use of agents in overseas markets means that marketing of British goods is largely in the hands of locals who have no particular interest in promoting British goods, which is why you rarely see any adverts for British goods in foreign media – TV and newspapers – while our media is stuffed with ads for foreign goods.

The new, welcome, push by the Department of Overseas Trade (DOT), to get British exports flowing, needs to engage directly with this problem.

One key issue is the extremely poor language capability of British companies, especially SMEs (Small and Medium-sized Enterprises with fewer than 500 staff). Courses in commercial German, Spanish, Italian, Portuguese, French need to be paid for by the DOT along with grants to get overseas selling agencies established in perhaps 20 key countries. As a German business colleague once said to this writer: “I sell in English, but I buy in German”.

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