Cut flower industry a cut throat business

The Competition Commission (CC) has dropped investigations into irregularities in the cut flower industry.

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A number of local chrysanthemum growers complained that three companies in Brits in North West, owned by Wim van der End – Greenway Young Plants, Amaranta Flora and Jotima Flowers – were acting as both distributors of cuttings as well as growers of chrysanthemum flowers for the local market. Trudi Makhaya, deputy commissioner of the CC, said the complainants alleged that these vertically integrated firms were competing with their customers in the growers market – they were able to get their cuttings cheaper than other growers and were flooding the market with chrysanthemum flowers.

In short, it was alleged Van der End’s firms had created a monopoly which was pushing down prices in the growers market, said Makhaya. One of the complainants, who did not wish to be named at this stage, said the chrysanthemum industry was under huge pressure and a number of growers had closed their doors. There were various reasons for this, but competing with their suppliers in the marketplace was a major contributing factor.

The source said the vertically integrated companies had an advantage in that they knew what varieties the growers were buying and who their customers were. “They can use this information to undercut the growers. That’s not a fair marketplace,” he said. However, preliminary investigations failed to convince the commission that the Competition Act had been contravened. Hence the investigation was dropped.

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The complainants now say they intend to take the case to the Competition Tribunal. Van der End said that, while he used to import and distribute cuttings as well as produce flowers, he had since lost the contract to supply cuttings and now just produced flowers, including chrysanthemums, gerberas and hydrangeas. He said he hadn’t felt relieved when he heard the CC had dropped the case, as “there was no case to begin with. It’s a free market. It just shows how farmers in SA work. It’s not about working together. It’s about working against each other.”