Why will plant prices need to increase?

Retailers are suggesting that plant prices could rise by up to 10% in 2018.

After the European and UK autumn plant show season ended, plant retailers are predicting price rises based on a range of factors. With the pound down to below €1.10, import prices are continuing to be more expensive.

In a Horticulture Week survey in 2016, 71% of growers and 59% of retailers said they planned to increase prices, although greater competition has meant that has not always happened.

Speaking this month, Alpha Plants owner Mike Roberts said UK young plant producers were seeing the benefit of exchange rates because there is "a nervousness around with borders and exchange rates", adding: "People feel they want a certain amount of trade banked to protect their position."

But he added: "There is going to have to be a price rise despite pressure from the big boys because even English growers are not going to be isolated. Commodities coming from the continent are increasing by 10-12%."

Roberts said Dutch importers facing exchange rate-led rises in plants should be less worried because UK prices are also likely to be up because of higher prices on imported goods, leaving a possible gap of around 5% between overseas and UK price rises.

Buying trend

Earley Ornamentals owner Simon Earley says growers are buying more from the UK because of exchange rates but costs of seeds, compost and plug trays are rising. "The biggest problem is commercial growers are struggling to get an increase from their customers. If everyone could get an increase it would work down the line. But there has to be an increase next year. We just can't absorb these costs all the time."

Nursery consultant Will George believes imports are 15% down, which partly aligns with FloraHolland statistics. While members of his nursery discussion group are having a good back end to the season, he says: "Prices are going up, not just plants but sundries priced in euros and dollars-oil-based products and compost."

Hayloft Plants' Derek Jarman says the big issues facing growers are rising costs and the detail of Brexit — "when that turns up". He adds: "Sometimes, in hard times, horticulture can do better than it does in good times if we all keep an eye on costs."

Jarman says paper, oil, cardboard, gas and other variable costs are rising, as well as the costs of plants from overseas. He adds that costs have risen by up to 20% on various inputs, on average at 9.5%, with LPG up 20%.

Plant prices from Holland, Germany and Denmark are up by however much currency has gone down. He suggests that if all costs rises feed through, "which they ought to", prices could be 10% higher and "no one is going to be any better off".

Kolff Plants managing director Jacob Kolff says Brexit has been good for no one. "Our plants are 15% dearer. A £10,000 order is now £11,500." But he is more worried about the UK economy slowing down than Brexit's exchange rate effects. "Demand for plants will go down and people will have less money to spend. Things are getting more expensive but you guys are on the same salary so it goes into a downward spiral."

Business as usual

Buckingham Nurseries' Chris Day says: "I'm seeing price increases. It's business as usual but prices are going to move up. Customers have seen it across other areas of retail and have to expect it. Everyone is looking at it through fresh eyes because of increases in wholesale prices."

He adds that growers are not detailing the breakdown of why they are increasing plant prices, whether it be because of more expensive compost, sourcing or currency. "We do our best to hold prices" but "long-overdue" 5-to-10% increases are on the cards.

Alton Garden Centre director Andy Bunker says "prices were noticeably higher" at Dutch nursery shows Groen-Direkt and Plantarium "as the almost one-for-one [euro v sterling] is hitting home". Retail prices could rise from £9.99 to £11.99 or £29.99 to £34.99 because of the changes in exchange rates since the Brexit vote.

Newey Group managing director Alex Newey says the cost of doing business is gradually rising because of "significant" exchange rate changes and prices are going to have to rise by 5-to-10%. Other challenges are rising labour costs caused by the National Living Wage and the lessening of the attractiveness of the UK as a workplace for Eastern European workers.

UK ornamentals were worth £1.2bn in 2016, an increase of 4.7% compared with 2015. The value of ornamental imports was just below £1.2bn, an 11% rise on 2015.

The Netherlands accounted for 74% of imports, mainly indoor plants, chrysanthemums and roses. Kenya accounted for 5.8% of imports, mainly cut roses and carnations. Imports of cut flowers showed a 13% increase and bulbs a 6.4% rise. Exports of ornamentals were worth £66m in 2016, a 20% increase on 2015.

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