Feb

14

 The Dutch flower auctions are renowned throughout the world for their pricing and distribution of flowers and plants. In 2004, they jointly generated sales of almost 3.6 billion euros. The auctions are cooperatives, in which breeders have united to organize their sales jointly. Initially the auctions were local cooperatives. In 2004, the largest auctions had members throughout the Netherlands and even abroad. Breeders generally have to sell their entire production through their own auction. That rule forms the basis of the auction system in the Netherlands. At the moment there are 4 auctions in the Netherlands: Bloemenveiling Aalsmeer, FloraHolland, Veiling Oost Nederland, Veiling Vleuten.

The function of auctions is to concentrate offer and demand. Everyday approximately 10,000 specialized breeders deliver their products to the auction. From that offer, approximately 5000 buyers make their choice. An important instrument is the auction clock, by which batches or individual units of products are sold by Dutch auction to the customer that first causes the clock to stand still. Handling approximately 100,000 transactions each day, the auctions distribute a vast, homogenous offer among a large number of different parties. The auctions work as an international marketplace.

Initially, the auctions handled only sales by local breeders and later by regional breeders. Nowadays, however, members of other auctions can offer their products as well. Towards the end of the 1970s it was decided that the auctions would also admit products from abroad. At this time imports constitute approximately 15% of the offer for the clock. The principal countries for import are Kenya, Israel and Zimbabwe. In this way, approximately 60% of the international cut flower trade is handled by auctions in the Netherlands, which thus have a pivotal role in the international trade of flowers and plants.

For traders the auction provides a virtually complete, deep and wide, range of 16,000 floricultural products on a single site. For producers, the auction guarantees their daily sales and the payment for them. The auction also offers a transparent market and an objective operation of the price mechanism. A minimum price is set for each product. It a batch is not sold, it is withdrawn (and destroyed). This leads to a stable pricing system, which in turn promotes a stable offer and stable demand.

Not all products are sold for the clock. In recent years direct sales between sellers and buyers, breeders and traders have become increasingly important. For houseplants and garden plants, approximately 50% of sales are realized through direct sales, almost always under forward contracts. For cut flowers, a day-fresh product, direct sales have no more than a marginal role at present. More than 90% of cut flowers are still auctioned.


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