Aussie Dollar Falls As Coronavirus Impacts Suppliers, CEO’s Predict Price Hikes
The price of sound gear could go up by as much as 10 per cent following the collapse of the Australian dollar to $0.66 today, claim some distributors.
However, some brands say that the biggest issue is not price rises but the impact of the Coronavirus on supply.
Both Qualify the distributor of Klipsch, Denon and Marantz systems believe that the fall which caught some Companies out will see immediate price rises.
This sentiment is also backed up by Indi Imports, the importer of Loewe, Canton and Q Acoustics sound and TV systems.
CEO of Indi Imports, Paul Riachi, says the price is going to go through the roof
‘Prices are going to go up through the roof, everyone is putting their prices up… It’s very hard to predict, but it’s going to get worse because of the Coronavirus.’
Riachi said that because suppliers did not anticipate the virus last December, a lot of companies will be forced to increase their prices.
‘A lot of guys are going to put their prices up nearly 30 – 40 per cent… Rises of a maximum 10 per cent increase will hit the market,’ he said.
Belkin Managing Director, Stephanie Ogden, said that it is a case of wait and see.
‘The issue for us is not the dollar but supply and our ability to deliver on retailer purchase orders going forward,’ she said.
She said that the Coronavirus was set to impact retailers because a lot of distributors come from affected Asian regions.
‘We’re really just starting to understand now production and how that would be impacted. We will manage our channel partners and see where it goes.’
The spread of the potentially fatal Coronavirus and the closure of businesses across central business districts in China is the biggest concern for supply according to Ogden.
‘If they’re not working, there’s nothing to ship.’
Her sentiments are also backed up by the CEO of Cygnett, Paul Santoro, who also states that their prices will not be raised at this point.
Instead, Cygnett will sit on the developments and will only review their prices if the Australian dollar falls below $0.65.
‘There will be no price rises for us, we’ve edged. The Australian dollar has been sub $0.70 for around six to eight months,’ Santoro said.
‘It is tough… but Cygnett has no intention of increasing prices. If the dollar hits below $0.60 that would be bottom line.
‘We will review our prices if the dollar drops below $0.65.’
But Phil Sawyer, the CEO of Synergy, disagrees claiming that there will be no fall out from the dollar collapse and stated that the dollar had started to ‘fall a long time ago’ and that Companies like his had factored a fall in the dollar into their business plans.
The Australian dollar has been tumbling over recent years according to Sawyer, who says he is not so concerned over today’s fall and that the biggest fall happened last year.
‘I think the Australian dollar has already suffered. It fell a long time ago if you look at the five-year charts… These recent developments are not the most historic,’ he said.
‘There’s been no major fall in my opinion. I’m not that stressed by it, we can handle minor fluctuations like this.
‘It dropped from $0.72 down to $0.60 in early 2019. That was a big fall,’ Sawyer said.
But he agrees that the Coronavirus coming from China is most likely the driving force behind today’s price fall.
‘The drop is probably driven by the Coronavirus.’