Imports of Christmas trees from the Continent are declining, which gives British growers an opportunity to capture a greater market share. Fortunately, home production has been rising in recent years, but there is still concern that some retailers and their customers may go short this year.
The decline is down to a number of factors. Firstly, production in Denmark has been falling since 2004 as a result of the reform of the Single Farm Payment policy offering subsidies for other land uses. This, compounded by unattractive returns, convinced many Danish growers to switch to the production of other crops.
More recently, a strong euro has made importing trees from the Continent less attractive, and as the krone is pegged to the euro, this has further affected Danish imports. Meanwhile, the high cost of fuel is adding greatly to the cost of freighting trees long distances.
Danish Christmas Tree Growers' Association director Kaj Ostergard says: "At the moment the number of Christmas trees available for harvest is declining. Prices were poor five or six years ago, so not enough were planted - not just in Denmark, but in Germany and France too. There is now a lack of one to two million Nordmann firs across Europe. But because of the harvesting in Scotland, there should be enough for the British market."
Reduced supply will inevitably lead to higher prices, he says. "A lot of deals are already higher priced, even before you include the higher cost of transport," he says.
However, he believes this is unlikely to deter customers. "We have found that 80 per cent of customers can't remember what they paid for their tree last year, so they are unlikely to notice the rise," he adds.
Meanwhile, British Christmas Tree Growers' Association (BCTGA) secretary Roger Hay says: "Supply is just about level with demand." British consumers buy eight to 8.5 million trees each year, he adds.
Joseph Noblett, a major importer of Danish trees, has started taking trees from Scotland. Company representative David Holt says: "Some people like the idea of a Danish tree, which we can still supply, but because of higher transport costs the prices will be higher." Using a range of suppliers allows him to keep an eye on quality, he adds.
"We don't know yet if there will be a shortage. But if the price gets too high, people are more likely to buy an artificial tree."
Anders Nissen, owner of Angus-based Highland Nordmann Fir Christmas Trees, says: "There isn't an over-supply now, as there has been in the past. We will supply our regular customers first. Growers who have fewer existing customers are likely to get calls from new customers."
Nissen doubts that UK growers will rush in to plug the gap in supply over the coming years. "Ordinary farmers don't want to go into Christmas-tree growing," he says. "Grain is at a high price right now - why would you want to wait six to 10 years for a return? There would have to be a significant difference, and there isn't."
But while UK growers hold back, several Danish firms have seized the opportunity to expand production here. "There are four or five Danish companies that have been investing in Scotland along with other European countries," says Ostergard. "They now have over 1,000ha in Scotland alone."
Hay adds: "There has been quite significant Danish investment, going back 10 years or more. They have always concentrated on Nordmanns, and have become experts in growing them. They have bought up farms, planted them up with Christmas trees, and are doing very well."
Green Team Europe (GTE) is one such firm. It is a significant player across Europe, selling around a million trees per year, 600,000 of which it grows. It has invested in Christmas-tree growing in France, Poland and Hungary as well as Denmark. But its biggest investment abroad has been in Scotland, where it now owns five Christmas tree farms in Aberdeenshire together covering 650ha.Last year it also bought Kent-based Eden Park Christmas Trees to distribute its trees in the UK market.
Hans Andersen, forestry engineer and company partner, oversees UK production. "Land is hard to find in Denmark, and expensive," he says. "But we have the know-how which we can use outside our boundaries. We couldn't grow on this scale in Denmark.
"But here we plan to keep planting and increasing production until we have 1,000ha or more. There is quite a lot of good agricultural land here, and the climate is suitable. The trees won't flush too early and get damaged by spring frosts."
The company's most recent planting is at Tillygreig Farm near Oldmeldrum, where 240ha has been planted up with around 1.8 million trees within the past three years. Andersen describes it as "the biggest one-off planting of its kind".
The company's strategy is to sell directly to retailers, particularly the larger ones. "To sell to the bigger players, you need size, and traditionally British growers are quite small," he says. "We try to sell as directly as we can, so to garden centres rather than wholesalers. It keeps down transport and handling costs."
Enquiries are coming earlier in the year, he adds. "We now get enquiries before the previous Christmas is even over, although the garden centres don't start until spring."
The company's own labels, attached in the field, indicate a tree's size and batch, and also provide the customer with information on its care and provenance.
The company also supplies point-of- sale banners and stands that allow the tree to be watered once in place. "Convenience is important for a lot of people," says Andersen. "The internet is a growing market for that reason."
GTE also sells to other UK suppliers, and ensures its own supply through a sister company that provides it with seedlings.
Last year, GTE harvested 175,000 Scottish trees, over 90 per cent of which went to the UK market. "It makes sense to grow trees for the British market in Britain, mainly from the perspective of transport," says Andersen.
"Also, there are differences between customer taste in Britain and the Continent. For the UK, it has to look dense and well-shaped. In Germany they want something sparser, with more levels, for hanging decorations from. And the Dutch and French are lower-quality markets."
Economies of scale have allowed the company to invest in specialist equipment to plant, harvest, net and palletise trees. But pruning is still done by hand. "Pruning machines have been developed, but not with great success," says Andersen.
The company employs contractors for planting, spraying and harvesting. In the past it has relied on Polish workers for this but, as Andersen admits, the exchange rate has made that more difficult. "You can't always find enough people for temporary work, which means you have to work as efficiently as possible," he adds.
On the issue of this year's market, he says: "Most garden centres noticed price rises last year, and with a shortage of trees, that will continue this year. The exchange rate hasn't helped."
He adds that larger trees may be harder to source. "Good demand has led to more trees being harvested," he says. "If you can get a good price for a 1.5-2m tree, why take the risk? As a result, there are fewer big trees over 2m around."
Though Christmas trees are not a demanding crop in management terms, roe deer are a big problem in winter, as are rabbits, while thistles are the main weed, Andersen says. "We use non-residual herbicides. Roundup has doubled in price since last year. But we use it at very small dosage, so it's not an expensive treatment."
Andersen sees no immediate likelihood of Christmas trees joining the vogue for organic production, though. "Without the nutrients, you wouldn't get proper colour and it wouldn't look healthy - especially the Nordmann. But you can use organic manure, and weed mechanically as well."
He believes the environmental case for real trees is strong. "They absorb CO2 while they are growing, and we are producing close to our customers. An artificial tree needs several times more oil to produce."
Low-intensity regimes on the plots, interspersed with un-mown grassy rides, also makes the fields a wildlife habitat, with ground-nesting birds such as skylarks, lapwings and partridge in abundance. "We're not hysterically clean," says Andersen. "There are more weeds, seeds and insects for the birds than in a normal field."
POLYETHYLENE: AN ARTIFICIAL RIVAL
If customers find real trees expensive or hard to get hold of, they may well be tempted by a new wave of artificial trees manufactured using polyethylene which, it is claimed, differ from the real thing only in smell and touch.
According to Perthshire-based Christmas Tree Warehouse sales manager Charlie Shentall: "Last year PE (polyethylene) trees were too expensive. They still carry a price premium, but if it has a three- to five-year lifespan, it almost works out cheaper. They may well tip the customer from a natural to an artificial tree. But it will take a couple of years to make a real impact."
These PE trees contrast with "still bog-standard tinselly trees at ridiculously low prices that are not designed to last more than a year", he says.
However, the artificial tree market is also affected by inflationary pressures, he adds. "We manufacture trees in China - though with costs rising 15-18 per cent annually there, plus transport costs, it's on the cusp of being comparable with production in eastern Europe. And our transport costs have nearly doubled."