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DHL reveals the cost of doing business in new EU member states

Pressmeddelande   •   Maj 18, 2004 13:39 CEST

Poland offers the cheapest meal deal for a three course dinner; Hungary has the best value hotel rooms, while in Estonia you can enjoy a five mile cab ride for 2.5 euros. These and other price facts are included in DHL’s Cost of Business report which reveals how much UK exporters could spend doing business in the 10 new European Union member states.

With over half (53%) of UK exporters planning to increase trade to the new EU nations during 2004, and “100,000 jobs linked, directly and indirectly, to the export of goods and services to the new member states” (Tony Blair, April 2004) Europe’s largest express carrier has stepped up to offer UK exporters an insight into the cost of conducting business in the new member states plus a series of top exporting tips.

In addition to identifying the average outlay for key business expenditures in the 10 countries, DHL also looked at the same purchases in large ‘Western’ business hubs (London, Paris, Frankfurt, Dublin, New York). A cost per item price index was produced with 100 set as the Western average benchmark.

Key findings: (tabulations are available at the end of the press release and the full report is available on www.dhl.co.uk )

 Poland is the cheapest place among the new member states to buy a three course meal at €14, which is €30 less than in New York and London and half the price of Lithuania

 If you want to stay overnight, you’ll find the best deal in Hungary where it’s €58 for a four star hotel room compared to fellow new member Slovakia, where it costs €115

 Hungary and Frankfurt top the taxi ride poll, costing on average €20 for a five mile journey compared to just €2.5 in Estonia and €6.5 in New York

 If your Lithuanian is not up to scratch then a translator is comparatively good value in this new member state at €620 per week. It’s much more expensive to cross the language barrier in Slovenia (€1,900) and in Germany (€5,938 per week)

 The cheapest country among the new EU joiners to conduct business in is Lithuania at 38 points closely followed by neighbour Latvia at 47 points

 The most costly of the 10 new states is Slovenia; at 86 points it is 16 points higher than Paris

 And it’s cheaper in Dublin too…at 68 points it is less costly to do business than in Slovakia (70 points)

 Of the areas surveyed in the report, the city/country with the highest cost of business is Frankfurt at 121 points followed by New York at 117

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DHL European Product Manager, Chris James has the following advice for UK exporters looking to enter the new markets:

 As the trade barriers come down, this provides an excellent opportunity for UK exporters who may have been put off by the customs and red tape restrictions in the past; from May 1st companies can make the most of the free movement of goods
 Get to know your target country inside out; develop commercial partnerships with your contacts, brokers and of course your market. The DHL Cost of Business Report is a good example of the need to be prepared, armed with local knowledge
 Ensure there are no hidden costs in your dealings with the new member states; this goes back to really researching your contacts and the traditional methods of operating within the country
 DHL has the most extensive express network across all the new member states offering a one stop “door to door” service for UK companies, importing and exporting goods to and from the UK
 DHL’s new Trade Automation Service (TAS) is a single source tool that allows exporters and importers to confidently cut through any remaining red tape; the service includes an on line exporting cost calculator, and the capability to verify that your goods shipment is compliant with customs regulations. Visit www.dhl.com/tas

For further information see the DHL EU enlargement brochure ‘The Power of EU Enlargement. More Europe. More Benefits.’ on www.dhl.co.uk

Commenting on the trading potential for UK exporters, Paul Lankester of Ionscience in Cambridge said: “We have been shipping goods to some of these states in the past, and definitely see European expansion as an opportunity to create business with all the new member states - more uniformity will certainly bring down shipping costs as well as cut transit times through customs.”

“EU expansion has created a single market larger than the US and Japan combined, with 74 million new consumers," according to Janet Tibble, editor of Overseas Trade, the UK's number one export title. "With the abolition of trade barriers and free movement of goods it has never been easier to export to Eastern Europe. Enlargement will bring about an increase in GDP within the new member states, which in turn will give them greater purchasing power to buy our goods. In addition, massive infrastructure projects across the new EU countries offer great opportunities for UK companies, which have the much needed expertise.”


About the Cost of Business Report

How does the cost of business work?
The survey was compiled with IRB during March 2004.
To compile the DHL Cost of Business Report, we have collated an index that amasses the different prices of literally doing business in another country - from hotels and transport, to client entertainment and phone calls.

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This report focuses on the costs of those items in the new EU member states as follows:

• Cyprus (Greek)
• Czech Republic
• Estonia
• Hungary
• Latvia
• Lithuania
• Malta
• Poland
• Slovakia
• Slovenia


For each of the 10 countries we obtained three costs for each of the purchases below in their respective capital cities:

• Cost of four star hotel accommodation (one night)
• Four tickets for the opera/theatre
• Cost of three course dinner
• Copy of International Herald Tribune / English Daily Newspaper
• Cost of five mile cab ride
• Cost of mobile call
• Cost of telephone call
• Cost of one week on the Internet
• Cost of translator for one week
• Cost of car hire for one week

As a benchmark for the index, five “Western” cities have also been compared; Frankfurt, Paris, New York, Dublin and London. This benchmark has been given as 100 on the index and countries will fall above and below the 100 mark depending on the average cost of the items listed.


About DHL

With annual revenues of nearly €22 billion in 2003, DHL is the global market leader of the international express and logistics industry, specialising in providing innovative and customised solutions from a single source.

DHL offers expertise in express, air and ocean freight, overland transport and logistics solutions, combined with worldwide coverage and an in-depth understanding of local markets. DHL's international network links more than 220 countries and territories worldwide. Over 160,000 employees are dedicated to providing fast and reliable services that exceed customers' expectations.

DHL is 100% owned by Deutsche Post World Net.

For further information and a copy of the report call the DHL Press Office on 0208 818 8022.

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