Industry veteran, and former FCI publisher, Jaap Kras discusses the future of the Flower Council of Holland, which is hanging in the balance. This article first appeared in the May 2023 FloraCulture International.
“The Dutch flower industry began de facto in 1968 when six EEC member countries removed customs duty on goods imported from each other.
The beginning of the Customs Union allowed the Netherlands to export its cut flowers and plants more freely to Italy, France, Germany, Luxembourg, and Belgium.
The government policy In the Netherlands relied on three pillars: scientific research carried out by Wageningen University, education, and extension programmes designed to disseminate information on agricultural technologies and business management.
This triple helix approach with the Dutch government, academia and the industry led to a suite of fantastic results. I will probably always wonder why the government embarked on a different course of action.
I am also old enough to remember how Germany closed its borders for imported flowers in the run-up to Easter and Mother’s Day, always followed by a rapid price collapse at the flower auctions.
Since 1968, closing borders is no longer allowed within the EU for imported flowers and plants; and annual production and exports skyrocketed from approximately 250m Dutch guilders in 1968 to more than four billion guilders in 1980.
Horticultural sector bodies such as the Association of Dutch Flower Auctions (VBN), the Dutch Association of Wholesalers in Floricultural Products (VGB) and the Dutch floristry organisation (VBW) rapidly professionalised.
In the 1970s, the sector decided to set up a new organisation to grow sales for flowers and plants by building consumer awareness and funding PR and media campaigns. Soon after, the Dutch flower auctions, more than seven at that time, founded the Flower Council of Holland, in Dutch also known as Bloemenbureau Holland, which quickly earned international recognition through its iconic tagline ‘Bloemen houden van mensen’ (Flowers love people).
Life was easy in those days. Demand for ornamentals exceeded supply fuelling constant business expansion at the grower’s level. Nearly all flowers and plants sold through the auction clock, hosting a buyer’s audience that mainly comprised of florists and traditional wholesalers as the retail market for flowers and plants was still in its infancy.
In such a buoyant market, growers and floral wholesalers had no objections to paying an additional two per cent of their turnover to fund the newly established Flower Council of Holland. At that time, the flower auctions collected the money, which was subsequently transferred to the Council – the BBH levy.
The Council teamed up with wholesale and import organisations in the primary export markets for Dutch flowers and plants: >50 per cent Germany, > 20 per cent France, and >20 per cent Great Britain. Thanks to the visionary dedication of the Council’s former director, Niek van Rest, BBH campaigns and B2B events turned out to be very successful.
Today, the world has changed. Many growers sell directly to wholesalers, bypassing the levy meant to fund the Council. This problem is also known as freeriding.
For many years, the wholesalers refused to contribute the same sum of money to BBH as the growers did. This situation felt like an injustice.
Meanwhile, a toxic debate took root among the boards of the participating organisations, with the pertinent question being: How can we measure that the money spent on promotion leads to further growth of consumption?
The second next question was: What’s in for me? If I am a major export company and my contribution to the Council is so high, how does my company benefit from it, and where does all the money go0?
These are all well-known questions for the corporate boards overseeing massive promotion budgets, but they were impossible to answer for interprofessional organisations.
The bigger companies promote their products and protect them with specific trademarks. However, the Flower Council of Holland’s primordial task is to undertake generic promotional activities rather than embarking on brand advertising. And once Niek van Rest had retired, the Flower Council of Holland’s leadership failed.
Royal FloraHolland decided that from 1 January 2024, it will stop collecting the contributions for BBH.
The basis for the EU agricultural policy is redefined in Regulation 1308/2013, establishing a common organisation of the markets in agricultural products. This regulation allows the member states to extend rules of interbranch and producer organisations to non-member operators.
If Royal FloraHolland steps out of BBH, one can hardly defend BBH as a producers’ organisation. In the best-case scenario and with VGB support, you can call it an interbranch organisation
However, an interbranch organisation only is recognised if it represents an important majority of wholesalers or wholesale turnover, as proved by consulting all relevant stakeholders.
I fear that the support base will be too small to come to a governmental decision to make a rule that all growers and traders of flowers and plants in the Netherlands have to contribute to the BBH activities (what to do with import products?). So, this will mark the end of BBH.”