Budding battle over cut flowers

Nation's Business, Sept, 1986

Budding Battle Over Cut Flowers Growers hate them. Retailers love them. Wholesalers, caught between the two, don't know what to say. And consumers will not know for months whether they will have to pay more for the brightly colored objects of this intra-industry dispute--fresh-cut, imported flowers.

Planeloads of imports arrive every day from three continents, fueling a boom in the cut-flower business for the nation's more than 20,000 retail florists. But American growers complain that the boom is putting them out of business because of unfair foreign competition. They maintain that foreign governments subsidize flower production and that foreign growers dump flowers on the U.S. market at prices below production costs.

After reviewing a growers' petition alleging unfair competition, the International Trade Commision ruled in July that imports from 10 countries may indeed be injuring the domestic cut-flower industry. The countries are Canada, Chile, Colombia, Costa Rica, Ecuador, Israel, Kenya, Mexico, the Netherlands and Peru.

Five types of flowers were named: carnations, chrysanthemums, alstroemeria (a lily type), gypsophila ("baby's breath") and gerberas (a daisy).

The Commerce Department now must determine whether subsidies or dumping are taking place. If so, the trade commission can assess penalties or tariffs. A final ruling will take six months to a year.

Meanwhile, rival flower industry groups will continue their verbal skirmishes in the nation's most colorful trade dispute. Imports already account for 60 to 70 percent of the cut flowers sold in the United States.

"A lot of American flower growers have gone out of business (as a result of imports)," says Raymond Hasek of Davis, Calif., spokesman for the Floral Trade Council, one of four growers' organizations that filed the trade commission petition.

That may be so, but imports are not to blame, says William A. Maas, executive vice president of the Florists' Transworld Delivery Association. FTD adamantly opposes restrictions on flower imports. "The flower business is changing from mon-and-pop production on small fields around cities to major production in places like California and offshore," Maas says. "The property many growers used became so valuable they sold out to real estate developers and retired."

Maas says FTD is "totally opposed to dumping" and is conducting its own investigation of that charge. "But subsidies are a moot point," he adds, because U.S. growers receive agricultural tax breaks that are tantamount to subsidies.

The nation's largest wholesale flower distributors association finds it difficult to take sides in the dispute because it represents both growers and retailers. "Right now, we're on the fence," says Archie J. Clapp, executive vice president of the Wholesale Florists and Florist Suppliers of America. He has commissioned a poll of the association's 1,100 members to guide its position.