Hedge your euro rate

Wine importers should expect to see sterling maintain its current level against the euro in 2007, according to a leading currency expert.

Charles Purdy, director at Smart Currency Business, said: "If I was planning for 2010, I would be looking at current levels for the euro and US dollar, and probably discount by a couple of cents for my budgets and/or target exchange rates.

"If I was buying from the euro zone I would budget for 2010 at, say, €1.09/£1, and if this works for the business, I would look to hedge a significant proportion of purchases for the coming year whenever you can secure an exchange rate higher than this."

Writing in Harpers Wine & Spirit, Purdy said: "I have several clients who secured a significant proportion of their 2009 euro purchases at €1.15/£1-plus. They used a simple product called a forward contract which can tie in an exchange rate for up to a year."

Currency fluctuations in 2009 meant there was a £16,000 difference in the high and low cost of a £100,000 purchase of euros, Purdy calculated.

Vintage Roots director Lance Pigott said: "We set prices in the spring and the euro has pretty much stayed the same since. It doesn't help the euro zone because those wines are more expensive than they were."

• Sommeliers