Possible sale of Floramax on the horizon

BayWa Aktiengesellschaft, the German company that now controls Turners & Growers has expressed an interest in selling the Floramax flower auction side of the business, a decision which could have significant ramifications for the New Zealand flower growers nationwide.

New Zealand Flower Growers’ Association President, Daniel Schuurman, says the NZFGA have been consulting with members to find out what growers would like to see happen with Floramax.

“From our consultation with members, it seems they believe the ideal scenario is for the United Flower Auction, a co-operative of growers, to buy Floramax with the intention of combining the two.”

Mr Schuurman says the majority of flower growers are in favour of the reduced overheads and single point of market that would come with the possibility of a UFA buyout of Floramax.

“Growers are realising if there is one flower auction company owned by growers, the industry will no longer have to bear the overheads and infrastructure costs of both auctions,” he says.

“The overheads essentially come out of growers’ commission, so there are certainly savings to be made.

“Growers also seem in favour of the single point of marketing, where all buyers come to the same place, instead of being split between two auctions, especially in Auckland and Wellington. In an auction, the more buyers there are, the more competitive the auction becomes.”

Mr Schuurman says there are concerns from the industry if Floramax is purchased by a privately owned company again.

“Private equity firms are purely profit driven. They are not interested in how their decisions affect the industry as a whole, which is a concern for growers.”

Mr Schuurman says he is continuing to consult with members, and hopes he will obtain further feedback in the coming weeks.

“The NZFGA is interested in hearing all its members’ views about the Floramax issue.

“Members should feel more than welcome to approach myself, or other members of the NZFGA Executive Committee, to make their opinions known.”