Suppliers to amenity market say plant prices must increase to meet costs

Growers supplying the amenity market say plant prices will have to go up to "realistic levels to reflect the true cost of production".

Plant prices have already been forced up by a 40 per cent price increase of bulk diesel since 2007 and a 20 per cent increase in wage costs over the past three years.

The HTA Amenity Suppliers Group - which met recently to discuss how nurserymen can respond to the higher costs of diesel, wages, packaging and imported plants - said plant prices will have to be put up further or ornamental growers face going out of business.

They have asked landscapers to work with them to "take these increases on board".

A statement from the group said: "In an industry where it is not uncommon to find examples of plant prices that have not increased over the past 10 years, a combination of increased costs in all areas of the supply chain means that prices need to go up to realistic levels to reflect the true cost of production. Substantial increases are needed now if growers are to survive in business."

It continued: "There is concern for landscape contractors who may not be aware that prices have gone up so much or that they will continue to do so. Unless they take these increases on board they will find themselves unable to purchase what they need at their tender price, forcing them to make a loss on plant supply or buy sub-specification stock, which will not be positive for the industry."

HTA Amenity Suppliers Group chairman Tim Edwards said: "As an industry, we have managed to sustain constant prices for plants for a considerable amount of time through achieving improvements in efficiency and accepting falls in levels of profitability. However, in this time of rapidly increasing costs across the whole of the supply chain, there is no doubt that plant prices need to continue to increase in order to truly reflect the inputs that go into growing plants and to sustain margins."

He added: "While nurserymen are aware of this situation - knowing that they simply won't be able to sell plants at (last year's) prices - the message needs to be carried through to landscape contractors in order for them to cost up future jobs correctly."

Johnsons of Whixley managing director Andrew Richardson said: "It's got to the stage where amenity growers can't afford to stay in business in this marketplace. We're going to have to agree within the industry that prices have to go up.

"We will work with our own key customers. We will have to work together to get the prices up. At the end of the day we've got to make a reasonable profit. There won't be a supply base into the (amenity) sector unless we do.

"In my 15 years of working in sales (of hardy nursery stock), prices haven't gone up. In fact, some have gone down. For example, a three-litre plant of Prunus laurocerasus 'Otto Luyken' first cost £2.20. It now costs £1.35, which is incredible considering it takes three years to grow."

NURSERYMEN'S COSTS

Increased costs include:

- 20 per cent increase in wages in the sector over the past three years - primarily due to the Agricultural Wages Board;

- 11.5 per cent increase in the cost of running a 44-tonne truck during the year;

- packaging costs are up 38 per cent for dispatch cardboard boxes and 10 per cent for wooden boxes due to haulage cost increases;

- the cost of plastic pots has risen by up to 10 per cent;

- young plants are up by up to 10 per cent, along with substantial increases in the cost of finished plants from Europe.


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