TAKE a consumer product like Madonna's newest CD, reprice it from a European national currency into the euro and a funny thing happens.

Those key price levels that supposedly push consumers to open their wallets - 25.95 deutschmarks, 44.95 guilders, £14.99 or a nice even 148 French francs - are suddenly gone.

What's left are odd euro prices like 13.27 in Frankfurt, 20.40 in Amsterdam, 19.03 in Dublin or 22.56 in Paris.

Retailers and consumer goods companies know this as the "price-points" issue, and it is one of the trickiest bits of a massive euro repricing process getting under way ahead of the scheduled January 2002 launch of euro coins and notes.

Whether it's pop CDs or breakfast cereal, businesses across Europe are wrestling with the question of how to reprice their products for the euro, both profitably and equitably.

For example, Diageo plc has announced that it will issue menus this summer at its Haagen-Dazs ice cream cafes across Europe with prices in both euros and national currencies. How the converted euro prices will exactly look was not disclosed.

At the root of the issue is the conviction among marketing experts, based on much research, that price points matter. Indeed, according to the Chartered Institute of Marketing in Britain, 64 per cent of all retail prices end in the numeral nine.

"Consumers automatically think in terms of tens. So if something is priced at nine, it registers subconsciously that they're getting a bit of a discount. That's the theory," said institute spokeswoman Ms Claire Forbes.

People understand and expect such prices. Do away with them and confusion results, which is the last thing businesses want to stir during the already confusing euro transition.

To hit the right price points after conversion, businesses said their first approach will be to round off euro prices. But the key question is in which direction - up or down?

Rounding up may pad profits, but could infuriate increasingly savvy consumers, while rounding down could hurt profits, but win market share by under-pricing rivals.

For instance, if a CD costs £14.99 in record stores - that's €19.03. Stores may be tempted to round up the price to, say, €19.05 and skim two cents of extra profit.

But with competing shops just down the street, stores may fear being undercut and so round down the CD's price to €19 or even €18.99 - handing the consumer a windfall discount.

"What we don't want is people thinking that this will be an opportunity for retailers to raise prices because that won't be the case," said Ms Cheryl Kuczynski, spokeswoman for the British-based international retailing group Marks & Spencer plc . European consumers are perplexed by and somewhat suspicious of the euro, according to a recent survey. The poll of 1,000 shoppers in five major cities by the retail consultancy European Insight Group found some fearful of abuses by retailers.

The Irish were the most afraid the euro would cause creeping price inflation (44 per cent), with French and British views more mixed, according to the survey conducted on the streets of Paris, Dublin, Milan, Hamburg and London.

Majorities in all five cities said they did not expect to get "better value for the money" under euro pricing - an attitude retailers said they hoped to overcome before 2002.

Aside from rounding, another option exists for firms whose products can change from market to market. Item sizes and packaging, of food or drinks especially, could be altered to protect price points, profits and market share.

"I don't think the trade will let anybody round (prices) up . . . What we feel is that rounding will be down," said Mr Ian Johnston, managing director of the confectionery business at international sweets and soft drinks giant Cadbury Schweppes.

"So we're going to say, hang on a minute, do we want to sell that same size, or do we want to do something different. That's the work that's going on at the moment . . . As a company, we won't take advantage of anything, but we don't want to suffer from it either," Mr Johnston said.