Market pressure sees producers cut prices

Amenity and landscape plant producers are cutting prices to keep business rather than passing on ever-increasing costs.

Cash and carry: prices are dropping despite more increases in costs - image: HW
Cash and carry: prices are dropping despite more increases in costs - image: HW

Some amenity and landscape plant producers are cutting prices despite their costs increasing by up to 20 per cent this spring.

Landscape plant supplier Robin Tacchi Plants sales and contracts manager Phil Rusted said the company was dropping prices because of market pressure in the building and construction sector.

"Prices are going down, while costs are going up," he said. "There is downward pressure in the industry, so there has been a slight drop of four to five per cent. Compost has gone 20 per cent up. That is one part of the price and it puts yet more pressure on costs."

Landscaper supplier Coles Nurseries sales manager Andy Garner said: "We are trying to get them (prices) up but people are panicking and they are still dropping. It's especially trees and I've seen some appalling tree prices. They are trying to create demand that isn't there. Some tree prices have been half what I would expect."

"The weather has meant orders have been down. But costs are going up - compost, oil, labour - and on the back of orders being less, transport costs are also up."

After a poor peat harvest, compost price rises have varied on contracts and suppliers. Coles, which is in the second year of a two-year deal, has no increase, Tacchi has a 20 per cent price rise and Johnsons of Whixley a six to eight per cent rise.

Imported stock such as laurels and viburnum are more expensive too, because they are in shorter supply after the cold winter in continental Europe in 2011-12.

Palmstead Nurseries marketing and sales manager Nick Coslett said: "We've seen the usual spiralling down of prices in the autumn for amenity. This has been accelerated by certain players in the industry becoming extremely competitive. There is a bit less work around. Confidence in the economy means there are fewer larger jobs and the weather has lead to work being deferred.

"Nurseries are hungry for cash flow and push prices down. We see this every year, but I would say it has been more competitive this year. It will creep up in the spring, but often landscapers expect us to hold prices for a year."

"We are not putting our prices up this year - our commercial competitive price has gone down," he said. "Our customers know that there's value in the quality of the plants and the service we offer. It's all about knowing the customer."

Derek Smith, owner of bedding grower for wholesale and landscapers E Smith & Son, said: "We haven't put up our prices this year even after a significant increase in peat prices. We feel nervous about any increase. But our orders are good across the board, though orders on the book are one thing - you need delivered product."

Growers supplying the retail market said prices are holding. Woodlark Nurseries managing director Colin Edwards said: "We talk to customers and try to meet price points. We have to agree a figure. It's difficult because last year was so bad. Peat has gone up and oil never seems to go down."

He said the firm was putting up the price of its two-litre poinsettia range and was planning to grow less.

"We have to talk to our customers and they are not unsympathetic. On lines with less volume and more margin they are happy for us to put a few pence on. It's about trying to meet price points. If they can meet their margins, they are happy for us to have an increase. We can't put a blanket one or two pence on products. Our customers are not very bullish at the moment - they don't feel they can put up prices."

British Protected Ornamentals Association chairman Ian Riggs said: "There's a lot of price pressure. Heating bills are up, compost is up, Agricultural Wages Board wages are up and requisites are up, so prices should also go up.

"But it's a question of negotiations and what the market will stand. It's a regrettable position that we can't pass on cost increases and businesses have to look for more cost efficiencies."

HTA marketing head Andrew Maxted said he did not think retail plant suppliers could cut plant prices after a poor 2012. But he said he expected some amenity tree prices to rise after ash tree movement was banned in 2012.

Amenity plants - Johnsons pushes up price

Johnsons of Whixley director Andrew Richardson said he has managed to push up amenity plant prices after they reached "rock bottom" in the past couple of years.

He added that many amenity jobs are now small and medium-sized, short-notice, "hand-to-mouth" contracts with costs cut back, no landscape architects involved and quick delivery demanded.

Richardson said setting up systems to cope with these projects meant Johnsons was 10 per cent over budget on amenity plant sales in 2012.

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