The UK’s horticultural sector could face being “wiped out” in just weeks by the coronavirus lockdown, an industry body has warned.
The Horticultural Trades Association (HTA) said the industry is facing a “crisis point” warning that a third of UK ornamental producers may fail in a matter of weeks.
It estimates the value of lost plant sales in the UK will be £687 million by the end of June and if it continues, £1.2 billion by the end of December.
The perishability and seasonality of plants mean that the sector potentially faces total stock write-off unlike other industries. As a result, the HTA warns hundreds of UK growers face complete loss of income.
Around 650 businesses across the UK produce ornamental crops, which contribute £1.4 billion in total to the country’s GDP annually and employ over 15,000 people directly and almost 30,000 indirectly. Many of these jobs form a vital lifeline for rural communities.
The perishability and seasonality of plants means that an estimated £200 million of seasonal plants will have to be scrapped across the ornamental horticulture industry.
Sales dwindled dramatically since Mother’s Day weekend when demand is typically high but people were beginning to self-isolate, while lockdown means that there is unlikely to be any sales through to the May bank holiday, the busiest trading period of the year.
Calls for a rescue package
HTA chairman James Barnes was among those calling for a ‘plant scrappage’ scheme or Government rescue package.
“We have hit a perfect storm in the UK. The seasonality and perishability that is unique to our industry means that growers are potentially facing stock losses on an ever-rising scale as each day passes,” Barnes said.
Stock is one of the biggest components of asset value in the sector – stock write-offs will destroy the balance sheets of many and make it impossible for them to continue.
“We are calling for the government to work with the HTA, as the industry’s representative body, to come up with a financial support scheme to help those businesses which have had to scrap perishable stock and are facing a huge financial crisis.
“For those that can stay in business, there are also significant, longer-term issues as growers may not have time to plant next year’s crop, leading to a two year supply hit on the whole industry including retail, which will severely impact the availability of British grown seasonal plants and flowers.”
The HTA explained that while the government’s financial measures related to the agriculture and horticulture firms are welcome, in many cases, they are not suitable for ornamental businesses.
Investment in stock means that many nurseries do not have the reserves to take on the debt of a government loan, and often fall out of the scope of any support scheme due to EU state aid rules.
Around 70% of bedding plant sales are made between March and the end of May. Many of these growers are facing huge difficulties and a near-complete loss of income due to the coronavirus.
It’s also feared the wipeout of British commercial growers will increase the volume of imported plants, raising the risk of Britain being hit by plant pests and diseases.
‘We’ve already paid all the input costs’
Porters Fuchsias is a family run wholesale bedding plant grower based in Merseyside. Natalie Porter said her firm risked a potential write-off of £350,000 should the lockdown continue for three weeks.
“The uncertainty surrounding the length of the coronavirus crisis is hindering the industry’s ability to make quick and efficient decisions to save businesses like ours. Time is running out,” she said.
Most of our summer stock has already been planted and will be ready in three weeks. Our remaining stock due to be planted will be ready in five weeks and go to waste in eight.
“We are facing a potential write-off of £350,000 in the next three weeks due to perishable stock. This would jump to £200,000 per week thereafter.”
Kernock Park Plants based in Cornwall has traded plants for nearly 40 years, producing up to 12 million plants a year, including herbs and vegetables.
Managing director Bruce Harnett said: “The recent fall in sales and mass cancellations from hundreds of our customers is extremely worrying, as we are now nearing full capacity with approximately seven million unsold plants on the floor.
We have already paid and produced for the inputs and the labour to create the products for nearly all of our sales, catering for the peak demands in spring and summer.
“We can’t simply shut the doors and struggle through waiting to reopen. I can only hope that we can continue trading in some way and secure some sort of compensation for our unique sector.”
Alex Newey, managing director of the Newey Group based in Chichester, said: “I can’t think of another sector which invests throughout the year for such a short sales window to recoup the costs.
We are about to lose an entire industry, which will severely impact the availability of British-grown seasonal fruit, vegetables, plants and flowers.
“We need to access funding immediately to avoid a catastrophe. This pandemic is hitting our industry at the worst possible time. We have made all the investment but have made virtually none of the sales. It is a low margin sector and, with all sales outlets closed, the costs will swamp businesses very quickly.
“Our problem is not one of freezing fixed costs or even controlling staffing costs but of the massive amount of money already sunk into the crop. This is crop that is perishable and will very soon be completely unsaleable.”
