Dutch Flower Industry
Since the mid-1970´s, the production and distribution of cut flowers in Netherlands has burgeoned. In 1995, Dutch growers produced over 8 billion blooms and the flower auctions collectively traded more than 5.4 billion guilders (about $3.2 billion) in cut flowers and potted plants, contributing over 4 billion guilders annually to the Dutch balance of trade. The Dutch flower auctions are key institutions in the world flower industry and a base for the flower trade in the Netherlands. They provide a setting where price is determined and where the growers´ supply of flowers meets the buyers´ demand. Buyers for various wholesalers and retailers participate daily in the Dutch flower auctions to purchase flowers which are then repackaged and resold to end-consumers or retail stores.
Key features of the Dutch Flower Auction
- The auctions use the "Dutch auction method"for price determination. This method uses a clock, where the clock hand starts at a high price and drops until a buyer stops the clock to bid and accept (part of)the lot. The clock was invented by a Dutch cauliflower grower in the 1870s.
- Modern flower auctions use a computerised clock.
- The Dutch auction is very efficient. It frees growers from the price determination process and the task of bidding and allows them to focus on production.
- The auction provides a central location for buyers to meet suppliers, allowing for efficiencies in the logistics of product redistribution and quality control.
- Aalsmeer, the largest of the seven Dutch Auctions, owned by a cooperative of about 5,000 growers, is the world's biggest flower auction.
- Aalsmer is spread across an area equivalent to 100 soccer fields and provides space for 2,000 buyers.
The Working Of A Dutch Flower Auction
Here is a typical example. Growers harvest roses for export to the United States by mid morning on any given day. By mid afternoon, machines will have sorted the roses by as many as 200 varieties, and by the length of the stems. These roses are gathered, labeled for quality, and packed in uniform plastic tubs for transport. By 10 p.m., the flowers arrive at the auction house where they are placed in cold storage overnight. The next morning at 4:30a.m., they are transported to the collection hall, inspected, assigned lot numbers, and assembled onto "stapelwagens" or uniform carts for transport into the auction hall. The stapelwagens are then towed into the auction halls where their contents are auctioned, beginning at 6:30 in the morning in auction rooms with up to 500 buyers. The computerized auction clocks in the room provide the buyers with information on the grower, product, unit of currency, quality, and minimum purchase necessary.
Once the auction is completed, each lot of flowers is tagged with a computer print out of the sale and distributed to the buyer´s area inthe auction house where they are repackaged and boxed for air or land transport (in case of distribution in mainland europe). Flowers exported to New York are transported on a special eight-hour flight, which departs Schiphol airport at 7:10 p.m. and arrives in New York at 8:10 p.m. local time. The cargo is then unloaded,inspected, cleared by customs and shipped to nearby warehouses or to other wholesalers for distribution the next day. Thus roses from an Aalsmeer greenhouse can be sold in New York within 48 hours after they are cut.
Other types of flower auctions
Apart from the Dutch flower auction, the other prevalent auction models include the English auction, Offer auction, Bid auction. Read more about the various flower auction models.