If Ital-exit happens ala brexit what does it mean for espresso machine exports?

West_Village

With the upcoming referendums about to take place in Italy later this year I believe, a scenario is developing in which it may be foreseeable that a brexit style situation could take place in Italy.

If this scenario does take place one would assume Italy would return to using its own currency instead of the euro. If so what are the implications specifically for the importation of espresso machines into Australia in any such event? Would prices drop due to a devaluation of Italy's currency against the Aussie?

Are there any other implications ( more so espresso machine import related ) that could arise around trade protectionism as we are seeing unfolding across the globe as we speak

Any thoughts?

Kelsey

You can already see what's happening thanks to LONDINIUM espresso. When I got my first machine from them in 2013/14 the £1650 Londinium I was about $3200AUD + $350AUD Shipping + $355 GST = $3905. My new LR is £1900 which equates to $3100AUD + $300AUD shipping + $374 GST = $3774 So even with a price increase of £250, my LR in 2017 is $130 cheaper that it was in 2014.

Koffee_Kosmo

You need to factor in the exchange rate at the time of purchase to know exactly KK

West_Village

I guess my fear is if trade protectionism around the world leads to unsustainable tariffs being placed on countries as part of an escalating situation, the fallout and price wars could be very painful for the coffee industry in certain countries at least ( not necessarily oz ) Case in point ( if looking at a few different countries) , America vs China. If America start imposing tariffs on all Chinese products and vice versa as a retaliatory action surely that will affect the import and export markets of espresso machines between the two countries. We look at the situation between Britan and Europe and a situation may unfold in a similar manner where tariffs are placed on all imports and exports between the two again affecting both prices and competition. In Australia as we are so heavily reliant on importing quality machines and beans for that matter , I wonder what the impact could be on profit margins for both machine retailers and coffee shops as a whole as it would lead to higher prices. On top of that the currency fluctuations that could occur either way. They are all probably risks which should be considered for the industry as a whole . Look at the geopolitical situation in Yemen and the war at this current stage and how that has greatly affected the supply of Yemen beans to global markets as well as the resulting price increases. Remember coffee is the 2nd most traded global commodity behind oil!!! Sorry for the doom and gloom however i wonder if this factors into any of the risk model projections for some of the larger coffee related companies out there who may have risk management as part of their business models. I know ( working in risk ) that political and geopolitical risks are very very high on the list for our company and many others in 2017 for the industry I work in.

Brett_H

We are living in interesting times and the trade partnerships forged only a few years ago between super-powers are being turned on their heads. I've no answers apart from hedge your bets, diversify and prepare for a rocky ride. Seriously, who would have thought the worlds more st measured political leaders would be German and Canadian!