Poinsettias: in demand but underpriced?

Buyers want more UK-grown stock but price and cost pressures still challenge suppliers, says Matthew Appleby.

Poinsettias: UK-grown stock to suffer from price pressures but is in growing demand from supermarkets  Image: HW
Poinsettias: UK-grown stock to suffer from price pressures but is in growing demand from supermarkets Image: HW

The UK-grown poinsettia market will be without 300,000 plants grown for Tesco by Kinglea Plants this year after the company went into receivership. UK growers faced with high production costs and low margins are likely to be reluctant to jump in to plug the gap, however.

Tesco says it will still sell some UK-grown poinsettia, but sources suggest that the shortfall will be made up by the Dutch supplier Intergreen.

While UK plants are often not as cheap as those from Holland thanks to the exchange rate, domestic poinsettias are seen as better quality, grown further apart and with more bracts. But rising heating prices are an ongoing and worsening issue for growers of the plant, as is bemisia. On the plus-side is the demand from supermarkets, which are enthusiastic about flying the British flag.

Chichester-based Hill Brothers production director Peter Hill says their output will also not change, in spite of foreign competition. "We'll grow about the same as last year. We fill what areas of production we have. There's no such thing as contractual obligation as far as our customers are concerned, but we remain confident we will have enough product for our customers and not more. It's pretty sure that prices at best will be the same as last year, with no increase at all. Poinsettia is not that sort of product at the moment," he explains.

"The exchange rate has made Dutch poinsettias cheaper. Luckily we are with Sainsbury's and they seem to wish to source 100 per cent UK-grown plants. They look after us well. But they are very competitive with Tesco and Asda."

Hill adds that supermarkets are concerned about losing sales. "We're stuck in a downward cycle where no major retailer is going to move upwards in price for fear of distancing themselves from the competition. All the while retailers are prepared to sell with no margin, they are going to be under that pressure. But next year when VAT rises, if the retailers are not prepared to absorb it in their margins, we can't as producers."

British growers grew more poinsettia last year - more than two million plants in a four million plant market - with supermarkets such as Sainsbury's and Asda expanding their "buy British" policies. Sales of the plant are up 50 per cent in five years, with some 13cm pots costing just £1.98.

UK suppliers to garden centres and supermarkets include Bordon Hill Nurseries, Hill Brothers, Pinetops and Copseys, Coletta and Tyson and Double H. Moerman, which grew 500,000 poinsettia annually, closed in 2008. Kinglea Plants closed this June.

Asda flower buyer Katherine Tilburn says: "We have noticed a shortage of British-grown poinsettias over the past few years but we get our bids in early so that this year, 80 per cent of the poinsettias we sell will be British. Last year we sold out really quickly so we have increased our numbers."

Hill Brothers produces mainly 13cm pots but also larger 25cm pots and 6cm minis. Peter Hill's aim as production director is to cut waste and produce all of his 450,000 crop to specification. He uses Dummen 'Infinity Red' propagation and is constantly mindful of potential whitefly problems that could damage the crop. "It is a huge battle because bemisia is resistant to so many different products. It's a big worry," he says.

British Protected Ornamentals Association (BPOA) treasurer Simon Davenport says, however, bemisia has been less of a problem for growers this year. On the issue of price rises, he says they would potentially damage the industry.

"People would like to see higher prices but it is a question of whether the market would stand that," he points out. "There used to be a certain level of pricing but we're at similar prices now as we were 10 years ago. For the supermarkets, poinsettia are a loss leader. Growers have to be creative. There are two markets now, commodity volume for multiples and the garden centre market, which is trying to create different products that are sold at better margins." With this in mind, the BPOA/HDC Poinsettia Group met last week at Woodlands Nursery in Leceistershire to discuss bemisia, promotions, future R&D and cool-grown crops.

Pinetops Nurseries director Rory Paton agrees: "Prices are static. On pests such as bemisia, everyone is twitchy, but we're managing to control them. There's strong demand for UK-grown plants but we're at capacity at 100,000. It is heating costs that drive the whole thing up. Gas prices are 47p a therm from November to March and could be in the mid 50s by 2011."

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