Franc's rise against Euro is French town's gain | business | Hindustan Times
Today in New Delhi, India
Feb 23, 2017-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Franc's rise against Euro is French town's gain

business Updated: Aug 07, 2011 22:00 IST
AFP
Ferney-Voltaire

Swiss officials and businesses may be fretting about the franc's rise against other currencies, but one group of people are clearly loving it: Swiss consumers.

A mere 300 metres across the border in the little French town of Ferney-Voltaire, the first sign of the franc's rise against the euro can be found at the Carrefour supermarket's parking lot, where six out of 10 cars bear Swiss licence plates.

"This always happens when the franc is strong," said store manager Dominique Faustin.

"A large percentage of our customers do cross the border to take advantage of deals," he told AFP, without giving figures.

Switzerland currently finds itself a victim of its own success.

The small Alpine republic, with low debt and a strong economy, has proved irresistible to investors seeking a safe haven for their assets from economic turmoil elsewhere.

As a result, the Swiss currency has risen some 30% against the euro and nearly 40% against the US dollar compared to a year ago, a bane for exporters but a boon for consumers.

When asked if the exchange rate affected where he shopped, a customer who lives and works in Geneva, one of the most expensive cities in the world, told AFP: "absolutely, it definitely changed my habits."

"If you compare prices, everything is cheaper here, because of the strength of the franc," he said.

An AFP investigation showed that Roquefort cheese is 61% more expensive in Switzerland than in France, a head of Batavia lettuce costs 68% more, a 500 gram steak 50% more, and a bottle of wine almost double.

The onslaught of Swiss shoppers is also visible in the small German town of Weil-am-Rhein, across the border from northern Swiss city of Basel.

"The number of Swiss customers is clearly on the rise," Guenther Merz, manager of the Rhein Centre said, adding that there had been a 10 to 15% increase in revenues in the past few weeks.

"Normally, they come for meat, vegetables and fruits, where the price differentials are quite high," he added.

According to BAK Basel consultancy, this price difference will lead Swiss households to spend 310 million francs more shopping across the border this year than they did in 2010.

Retailers, including bosses of the country's biggest supermarkets, have come out to plead with Swiss customers not to buy abroad, arguing that it would hurt the broader economy and put jobs at risk.

But the shopping is not limited to small consumables.

Jose Cabellos, manager of real estate broker AJC Immobilier in neighbouring Annemasse near Geneva, said that there had been a 20 to 30% increase in the number of Swiss interested in buying or renting in France compared to a year ago.

"These people, who previously were not interested in moving to France, because of the exchange rate, are much more willing to take the step," he said.

"The (comparatively) low costs make living here much more attractive," Cabellos said.

The Swiss central bank has stepped in to halt the franc's rise but measures taken so far appear to have short-lived results.

This week the franc advanced to fresh highs against the euro and the dollar, and the central bank warned that the strong currency was now a threat to the economy.

But for the time being at least, consumers seem to be happy.

"Why would I shop in Switzerland?" a Carrefour customer said.