Russia’s floral wholesalers call for state aid to avert ruin

Author: Eugene Gerden

MOSCOW, Russia: Russian leading flowers’ wholesalers are feeling a massive drop in domestic demand due to the closure of malls, flower shops and garden centres, according to recent statements, made by representatives of the trade and industry analysts.

Due to the COVID-19 pandemic, both Russian flowers’ growers and importers are in an acute need of state aid. According to Roman Kharchenko, co-owner of Belaya Dacha Tsvety, one of Russia’s largest flower growers and importers, one of the ways to claim is by gaining the status of agricultural producers.

The provision of agrarian status will provide an opportunity to both importers and flower producers to argue for special subsidies from the state, and to receive various tax relief, customs, and other benefits.

Both importers and producers agree that the current situation in the Russian flowers market is the most complex since the collapse of the USSR in 1991.

According to them, due to the drop in demand for both locally grown and imported flowers, around 1.2 million flowers are daily ending up in the landfill.

As of now, market players have already called on the government to include their industry in the list of sectors, requiring state support due to the severe effects of coronavirus and quarantine measures.

Also, importers have asked the government to block the recent proposal by Russian growers to increase the customs duty from the current five per cent to 15 per cent which, according to them may result in significant growth of their costs and may even ruin their business.

Last year, was a record year for the Russian flower market, with overall sales exceeding RUB 180 billion (US$2,5 billion) in value and 1.8 billion units in volume. Of these, 60 per cent of transactions accounted for roses, with chrysanthemums and carnations, occupying the second and third places.

In an exclusive interview, an official spokesman of La Buket, another leading Russian floral wholesaler based in St. Petersburg said, the current crisis will result in a change of balance in the Russian flowers’ market. It will lead to the reduction of imports to the local market, which currently varies in the range of 85-90 per cent

According to the spokesman of La Buket, among the countries of origin for cut flowers in Russia are Ecuador, the Netherlands, Kenya, Israel. Ethiopia and Italy.

However, in recent years the share of imported flowers in the overall structure of La Buket’s range has declined in favour of domestic flowers. This change is mainly due to a notable improvement of the quality of flowers, grown in Russia and the weakening of the rouble in recent years.