US consumers of luxury leather products such as apparel and handbags are beginning to pay the price for the foot-and-mouth disease that is ravaging Europe and in particular Britain.

A sudden drop in beef consumption because of concerns about mad cow disease means far fewer animals are being slaughtered for meat. This, among other factors, has contributed to driving the price of steer hides up about 12 per cent in the last six weeks, according to HideNet.com, an online market report.

The surge in prices is already placing cost pressure on tanneries from South Korea to Italy that many in the leather industry expect to see reflected soon in US markets, especially for luxury goods.

Leather is a particularly global product. Hides from Argentine cows may be tanned in China, sewed into bomber jackets in South Korea and then shipped to Japan for sale. But not all hides are equally prized. In the world market, European hides are more highly valued because the animals are raised in a way that leaves the skins with fewer blemishes.

It is expected that designer fashions will take a severe hit. Manufacturers must purchase raw materials soon if they want to ensure that apparel is in the stores next September. The shortage of leather is mostly going to affect top-quality leather jackets and skirts, said Josephine Seidita, marketing promotion manager of footwear and leather and components at the Italian Trade Commission in New York.

The most immediate threat is the highly contagious foot-and-mouth disease, which has been concentrated in Britain but has spread in scattered outbreaks in Ireland and the Netherlands and elsewhere on the Continent. Despite the widespread restrictions that have been imposed because of the disease, Britain has authorised the slaughter of some 156,000 head of cattle, according to the Ministry of Agriculture, Fisheries and Food, a tiny percentage of the European herd, which is about 80 million head of cattle.

While affecting only a relatively small number of cows, foot-and-mouth disease is highly contagious, hurting the leather industry because farmers are burning animals, hide and all, as soon as a herd is identified as contaminated.

By contrast, slaughter from mad cow disease does not lead to total destruction of the animal.

But no country slaughters cattle and sheep for skins alone. The fear of eating beef tainted by mad cow disease has reduced the number of cows slaughtered from about half a million a week to 350,000, according to estimates from HideNet.com.

"When OPEC shuts off the spigot, what happens at the pump?" asked Charles Myers, executive director of Leather Industries of America, a trade group. "Of course the price is going up."