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Dutch Auc­tion under pres­sure

FloraHolland-June-for-WebWhile 2013 turnover for the Royal Flo­raHol­land Flower Auc­tion Coop­er­a­tive grew by 1.8% to €4.5 bil­lion, vol­ume decreased dra­mat­i­cally with the Auc­tion record­ing a loss of €7.4 mil­lion as a direct result of grow­ers increas­ingly mov­ing to sell­ing direct rather than putting their prod­ucts through the auc­tion. In addi­tion two large bank­rupt­cies and land deval­u­a­tion of €10 mil­lion added to the woes.

As reg­u­lar busi­ness oper­a­tions were unable to suf­fi­ciently absorb these losses, Flo­raHol­land has had to take mea­sures to bring the oper­at­ing results back to the desired level in the fore­see­able future and in Octo­ber ’13 imple­mented a reor­gan­i­sa­tion strat­egy – code­name Kom­pas — cost­ing in the region of €22 mil­lion which will be under­writ­ten by the mem­bers of Flo­raHol­land in order that the com­pany can main­tain its finan­cial stability.

Com­ment­ing on the results Gen­eral Man­ager Lucas Vos said: “In 2013, Euro­pean con­sumers stayed loyal to our prod­uct in what was a dif­fi­cult year. I am fully aware that there was not such good news in all areas. Our indi­vid­ual mem­bers saw vary­ing results and many com­pa­nies in this sec­tor have been strug­gling for a while. While the Nether­lands’ flori­cul­ture sec­tor has a solid struc­ture, we need to con­tinue to respond to devel­op­ments in the mar­ket from this strong basis.”

How­ever while Kom­pas has already resulted in changes, not just to costs, ser­vices and organ­i­sa­tion but 200 redun­dan­cies as well, greater clar­ity of the strat­egy has been demanded by both cus­tomers and mem­bers of the auc­tion. As a result Flo­raHol­land 2020 has been launched to more clearly explain the plans.

Gen­eral Man­ager Lucas Vos com­ments, “Strat­egy starts with one ques­tion: ‘Why?’ In our case the ques­tion is, ‘Why are mem­bers loyal to Flo­raHol­land?’ The sec­ond ques­tions is, ‘What are the spe­cific areas in which we need to excel in the chang­ing mar­ket to ensure that we earn and even increase their loy­alty in 2020 too?’ We will be answer­ing these ques­tions under Flo­raHol­land 2020 over the next few months.”