Dutch flower reign to encounter no challenge in near future

  • 2010-04-01
  • By Linas Jegelevicius

LET’S GO DUTCH: The Netherlands have long dominated the global cut flower business due to price, quality and delivery.

KLAIPEDA - My query at a local market’s flower stall on whether the fascinating roses and carnations are locally grown made a sullen-looking vendor, a woman close to retirement, raise her eyebrows. “I bet you do not buy flowers, do you? All flowers are imported here,” she quipped. Already in a friendlier tone, she was quick to assure me that the largely prevailing Dutch flowers are more enduring.

Alvydas Lukosevicius, chairman of Lithuania’s Association of Decorative Plant and Flower Growers, reluctantly acknowledges that foreign flowers score on many points, including the most important one - pricing. However, he argues the notion that Lithuanian flowers, quality-wise, are worse than those of the Netherlands. Besides, according to him, local flowers are sweeter and more redolent.

“March 8, which is known as International Women’s Day, was quite chilly this year, however, most flower vendors kept their tulips in the open air. Frankly, in my opinion, Lithuanian tulips are not that much more cold resistant than Dutch ones. However, seeing the impeccable looking Dutch flowers in the frost, I could hardly fight the sense that they looked kind of shoddy and plastic. Personally, I prefer Lithuanian tulips and roses, however, today price is the most important thing for most buyers,” Lukosevicius told The Baltic Times.

In Klaipeda market, one can buy a Dutch or Polish cut rose for 2.5 - 3 litas ( 0.71 - 0.90 euros), as, I was told, a Lithuanian rose costs considerably more - up to 4 - 5 litas at this time of year. On my trip to the market, locally grown flowers were not to be seen.

According to Lukosevicius, only approximately 10 percent of all cut flowers in the Lithuanian market are grown in Lithuanian soil, as others are imported, without a rival, from the Netherlands. For example, according to the Department of Lithuania’s Statistics, from 2008 through 2009, the cut flower imports from the Netherlands made up 95.4 percent of the total, as Poland, Denmark and Latvia shared the rest. Thus, in 2009, when it comes to cut rose imports, 12.9 million roses were imported from the Netherlands, and the rest of them were divided between Ecuador (11,100 roses) and a bouquet of 80 roses from Latvia.

Cut roses lead the flower imports in Lithuania, as other kinds of flowers lag far behind. The runner-ups in the market were cut chrysanthemums, whose import consisted of 4.1 million pieces last year. Out of the number, the absolute majority – 99.9 percent, or 4.1 million flowers - came from the Netherlands.
Last year, 3.2 million cut carnations, all brought from the Netherlands, were on sale in the local market, which takes third spot in the cut flower import statistics.

It seems that Lithuanians are not particularly keen on other kinds of flowers. Comparably, in the same period, only 218,000 cut gladiolas, all from the Netherlands, and 110,000 cut orchids of the same supplier supplemented the local flower markets, as the rest of the orchids, to be exact, 7,700, came from Latvia.

The Department of Statistics does not provide data on cut tulip imports and exports. However, referring to the prevailing flowers as Dutch can be ambiguous and misleading. “When we say a “Dutch tulip or carnation,” we should bear in mind that it is not necessarily grown in the Netherlands. One should bear in mind that the Netherlands is famous not for only its flower growers, but also for its huge flower trading, a kind of flower stock exchange, something that is available only in the Netherlands and in North America. Thus, flower stockbrokers trade there in the same way as their counterparts do in NASDAQ or the NYSE stock exchange. Therefore, in referring to the flowers as of Dutch origin, actually, we may be mistaken, as the flowers can actually be brought to the Netherlands from Argentina or Chile and re-imported from there,” Lukosevicius explained.

He maintains that such stark Dutch cut flower prevalence in the Lithuanian market is nothing extraordinary, as Holland has been traditionally famous for its floristic achievements and hegemony worldwide. The yellow tulips have long been the country’s symbol of peace, power and dominance, and its reputation as one of the world’s capitals of flowers has been painstakingly cherished and enhanced by the country’s authorities.

Obviously, for many reasons, first due to the lack of traditions and adverse weather, Lithuania cannot be called a blooming land. Nevertheless, its cut flower export turnover reached nearly 10 million litas, as the import turnover, in comparison, surpassed 100 million litas last year.  It seems that Lithuanian rose growers are singled out among other kinds of flower growers, reaching the export number of 4.7 million cut flowers last year. Almost all of them, 4.2 million pieces, were exported to Latvia and over 83,000 pieces to Kazakhstan.

The second on the export list, with 1.8 million exported pieces, lined up cut chrysanthemums. The bulk of the flowers went to Latvia (nearly 1 million pieces), much less to Kazakhstan (617,000 pieces) and Russia (212,000 pieces). The third in Lithuania’s flower export line follows cut carnations.

The actual numbers of flower growers in Lithuania can be guessed at, as many of them tend to cultivate plantations illegally, avoiding declaring their business or obtaining business certificates.
Thus, cheating on the state, local flower growers risk heavy fines, however, many see it as the only way to meet the unprecedented competition of foreign importers and the oppressing burden of high value added tax (VAT), which is 21 percent in Lithuania, compared to 6 percent for flower growers in Holland. Officially, there are approximately 10 floristic enterprises in Lithuania, largely involved with flower growing.

“I do believe that, due to the massive Dutch prevalence in the market, it [market] has been distorted, deterring local flower growers from assuming the business and forcing others to develop it, off the books. However, this is the price of free trade and the politics of Lithuania’s government,” Lukosevicius asserted.

Until quite recently, giving up to the vast Dutch reign in the market, local flower growers tended to grow all kinds of flowers in much fewer numbers, thus, provoking Lukosevicius to call Lithuanian flower cultivators “lazy” in an interview that sparked some outrage among flower growers. “Well, until quite recently, even in summer, carnations, roses, chrysanthemums and even gladiolas were brought from abroad, something unheard of for many years. Lithuanian flower growers just simply gave up in the competition, without  giving a serious fight. Therefore, I blew up. However, with the crisis-hit market, I see quite positive trends, as more people, especially those unemployed, start growing flowers. Unfortunately, the state’s politics are not in favor of the flower growers; therefore, hundreds of new growers work off the books, evading taxes. In fact, the proportion of local and import flowers until recently was heavily lopsided to the imports. I would say that up to 90 percent of all flowers were brought from abroad, however, now the proportion is hovering at equilibrium, maybe slightly giving an edge to foreign growers,” Lukosevicius pointed out.

With the flower sales turnover down 30 – 40 percent, local flower growers struggle to survive, first by decreasing flower prices by 40 – 50 percent. Andrius Valevicius, director of “Kedainiu siltnamiai,” an enterprise that specializes in flower growing and caters to specialized flower shops, market flower vendors, supermarkets and municipalities, suggests that customer volumes might be the same as before, however, buyers’ purchasing power has slumped nearly 30 percent, as flower prices went down by 30 – 50 percent.

“We are teetering on the brink of survival. Before the crisis, local municipalities made up a significant market share, however, this year, the sales for them for flourishing towns have decreased 70 percent,” Valevicius said.
Vaida Aleksandraviciene, owner of “Geliu sala,” the company that is engaged in the flower retail trade, flower bouquet sales in local flower stalls and on Internet, pot plant growing and sales, wedding and other festivity flower decoration, maintains that the flower business in Lithuania is sketchy and badly organized. “In Lithuania, we do not have specialized flower markets, where you can go and procure all kinds of flowers on the same spot. Such specialized flower markets function quite successfully in neighboring Poland and even Latvia. Now, if you seek a larger flower quantity, you have to go for tulips to Alytus, (south of Lithuania), for Transvaal daisies to Ziezmariai (close to Kaunas) and for other flowers to another location. That is insane. If we want to bring more order into the market, we have to start establishing such specialized flower markets,” Aleksandraviciene said.

According to her, creating this kind of market would help local flower growers to compete more successfully with the flower importers. “The flower wholesalers who buy flowers in flower auctions in the Netherlands’ flower exchange have a much better functioning network, which corners up small local flower merchants, who cannot penetrate into the large markets. This should be changed,” the entrepreneur concluded.

She is convinced that the flowers have become a luxury commodity in the crisis-stricken economy.
Before the downturn, for the businesswoman, it was quite usual to cash in on bulky wedding flower decoration orders, which would amount to a massive 3,000 – 5,000 litas per wedding. “Sadly, the good times have gone. Now nobody adorns wedding ceremonies with lavish flowers. Nobody lays the newlyweds’ path with handfuls of rose petals. Instead of 500 – 1,000 litas’ worth of elaborate bouquets, nowadays the bride clutches a modest 50 litas bouquet. There’s not much to do about it, but to wait for better times,” says Aleksandraviciene, remaining hopeful.