One of today’s six visits took us to the Ontario Flower Growers Co-operative, the plant and flower auction in Mississauga. Five years ago, the auction had become more or less redundant, but thanks to a few adjustments, it’s up and running again. One of the changes was the introduction of ‘af-tuin veilen’ – something that Royal FloraHolland is working towards as well.
We were welcomed by Ben Vellekoop. He became the director of the auction in Mississauga, Canada’s fifth largest city, five years ago. On his appointment, the Board of Management told him that the auction might not survive another six months. “If that’s the case, it won’t be your fault, but your name will be associated with the auction’s downfall”, they explained.
Vellekoop said that this didn’t scare him – he took the job and set about. One of his first measures consisted of cost cutting. During those days, many employees walked up the stairs to Vellekoop’s office in tears. They knew what they were being called in for: redundancy. Labour costs were drastically reduced. In 2011, the auction had 85 employees, nowadays, there are only 45.
There were other changes too, such as the introduction of auction presales, multi-transaction auctioning, the launch of two virtual clocks, image auctioning, ‘af-tuin veilen’ and remote buying (KOA). We learned all this from Vellekoop’s presentation in the bidding hall. Two of the four clocks are virtual. One of these is for the local growers. It isn’t used an awful lot. When we were there this morning, we noticed that it was active for ten minutes at the most.
The other virtual clock is for imports. Both virtual clocks work on the basis of ‘af-tuin’ delivery to the buyers. Local plants and flowers that are purchased through the virtual clock, are received by the buyer within two days. For imports, it takes a week to receive the goods.
Most Bleiswijk seats in the bidding hall were occupied by buyers this morning. And numerous buyers were taking part remotely. Vellekoop said that remote buying is rapidly increasing. Last year, 50% of all sales was realised via remote buying. And auction presale is also popular. Around a third of the supply is sold in advance. The plants and flowers that were sold beforehand are immediately removed from the trolley. The idea is that the half-empty trolleys that are then presented at the clock, will push up the prices.
According to Vellekoop, multi-transaction auctioning contributes to better price formation too. Up to nine button pushes that occurred more or less at the same time, can all be approved. It also speeds up the auctioning process.
There’s no obligation to supply to the auction here. Having said that, some measures were taken in order to maintain a steady supply and avoid that the auction becomes a dumping place. “Dumping is a thing of the past”, said Vellekoop firmly. Members pay a fee that’s based on the average supply of the previous five years. So, the quantity that a member supplies throughout the year is the quantity he’s allowed to supply in summer too.
No more than that. And if a grower does bring more, it’s time for some fun. Vellekoop is strict. He simply moves the trolleys outside. Regardless the weather conditions. The surplus definitely doesn’t make it to the auction clock.
And if a supplier delivers less in a certain month, he actually pays a fine, because the fee remains the same. Yes, some growers left. But Vellekoop thinks that that had nothing to do with the auction’s management. The main reason was that growers had reached retirement age. And they could sell or let their nurseries to cannabis growers for good money.
The commission rates that members and guest members pay, are high. Members pay 13%, guest members 18%. Vellekoop realises that these percentages are hefty, but he pointed out that if growers take care of sales themselves, that’s expensive too.
Buyers only pay 1% on their purchases through the clock by the way, in addition to an 800-dollar fee which allows them to buy via all systems (remote buying, gallery, auction presale and web shop). Buying online costs 3% because of the increased costs.
The auction is doing better than before. Turnover is slowly increasing by 1-2% each year. Last year’s turnover reached a total of 21 million dollar. The auction is still vulnerable, though. It has no more than 46 members, plus 80-90 guest members.
It was funny to hear Vellekoop say how he feels it’s ridiculous that there aren’t any traders on the auction’s Board of Management. VGB would be happy to hear that!
Vellekoop expects that the clocks will disappear in the near future. But he won’t be there, in his role as director, to see that happen. He resigned and he’s going to work with FleuraMetz. All the travelling was getting too much.
Vellekoop will leave the auction in a couple of weeks. There isn’t a successor yet. So I gave him a suggestion. The former director of FloraHolland, what’s his name again?
Arie-Frans Middelburg
