“Any illusions by our domestic market growers that they are immune to the influences of the Global Market place should now be well and truly shattered. For our domestic growers their competitor is no longer the grower down the road but a grower in India, Malaysia, or Columbia. The volume and range of flowers imported into this country over the last 8 months has been staggering and continues even at times when domestic production is strong. The implications for growers are simple. Innovate, meet the challenge head on or wither and die.
While no one can argue against imports (and there is definitely a place for them at certain times of the year), the sad reality is that many of the imports have been driven, not by market demand or lack of local supply, but by one of the two major auction houses seeking to bolster supply on the auction floor in the face of declining supply by local growers in favour of other marketing options. Indications are that vast quantities of roses and other flower types will be imported for Valentine’s Day this year and will be sold through the Floramax floors. What Floramax management seem to fail to grasp is that not only are they doing damage to the delicate balance which exists between supply and demand in the domestic market, but are also harming the local growers who remain loyal suppliers to their floors.
The economics of importing flowers into this country are risky. The high New Zealand dollar is certainly assisting, but when as many as one shipment in 10 is found to contain unacceptable levels of pests or diseases requiring extra fumigation or destruction, the landed cost of some flowers becomes similar to average market prices, even before the costs of processing, distribution and marketing around New Zealand are added in. One importer has been quoted as stating that he needs to sell his imports for 40% more than the landed price to make them economic. This begs the question as to how these imports are being financed. The rapid increase and then decline in the number of flower import companies since last June suggests that the business is far from lucrative and may not be sustainable at current levels in the longer term.
If the rumours prove to be true, then the importation of vast quantities of flowers at a time when generally there is sufficient supply from local producers (red roses aside) puts at risk the entire domestic flower growing industry. It would be interesting to hear from Floramax and Turners and Growers as to how they see their actions being compatible with supporting local flower growers, who incidentally pay the wages and salaries of the Floramax staff via the commissions they are charged. If the customer can be defined as the person who pays for a service or goods, then the current actions of Floramax management demonstrate just how far they have abandoned the founding ideals of the Turners and Growers company and their true customers – the growers. A 1% “promotion levy” is also collected from both suppliers and buyers. It would be ironic in the extreme if local growers and buyers are now paying for imports and their promotion in direct competition to New Zealand grown flowers.
The National marketing of flowers in New Zealand is currently going through a fundamental shift with the two major auction houses now following quite different business models and approaches to the domestic market. One is becoming increasingly focused on Imports while the other continues to focus strongly on supporting local growers. We can only speculate as to how it will all turn out and only hope that there are not too many casualties along the way.”