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. Last Updated: 07/27/2016

Traders Try to Put Bloom Back on Flower Sales

Rows of flowers imported from the Netherlands once lined the streets and markets in such abundance that Russians called all flowers "Dutch."

But last year's August financial crisis knocked sales for a loop, leaving flower traders from Dutch exporters to the everyday Russian street seller struggling to stay in business.

The ruble devaluation and the accompanying pinch on Russian consumer spending power hit even the Russians' renowned preponderance for buying flowers at the drop of a hat, flower experts said.

"Ever since the beginning of September, export volumes to Russia have slid down 60 to 70 percent," said Ruud von Veen, sales coordinator for Eastern Europe at Dutch company Zurel, the world's biggest flower trader.

"A lot of smaller companies just went bankrupt after the crisis," he said.

The cautiousness of Dutch traders has left the way open for risk-taking flower growers from Columbia and Ecuador to drive their way into the market.

"Traders from these countries are far more daring. They are willing to ship goods without waiting for prepayment just to make sure they maintain their presence in the market," von Veen said.

Meanwhile, Russian street sellers are finding that it is increasingly difficult to stay in business - not only because of falling profits but because they still must pay off the mafia.

Alik, the owner of a kiosk selling flowers near Belorussky Station, said falling profit margins in the wake of the crisis left him struggling to keep up "rent" payments to the local mafia.

"The mafia demand that I pay $1,500 every month for trading space, but when the ruble has devalued down to three times its former worth and roses from Holland still cost the same at about $1.80 each, then I really have problems making ends meet," he said.

Alik buys about 1,500 roses a week and sells them for about 70 rubles each. With a staff of 21 all working on commission and heavy dues owed to the local mafia, Alik says he lives in constant fear of being unable to meet the monthly payments for his patch. For now, however, he has managed to keep his head above water.

"I really couldn't say what would happen if I was unable to pay. I hope things don't get worse," he said.

According to Gennady Lostovsky, the head of Green Line, one of Moscow's major flower importers, flower sellers have every reason to be pessimistic."The cost of just one rose is equivalent to the price of 20 loaves of bread. If the economy does not pick up, flower sales are going to remain incrediblylow," he said.

Nevertheless, the Dutch are determined to maintain their presence on the Russian market. The Netherlands is the world's largest exporter of flowers with 1998 sales of cut flowers totaling $35 billion, or 60 percent of the market.

About 70 percent of the flowers sold in Russia come from the Netherlands, said Herman Beltmann, agricultural aide to the Dutch ambassador to Russia.

Until the crisis, business was blooming. Sales increased tenfold from 4 million Dutch flower bulbs sold to Russia in 1993 to 40 million last year, Lucas Boreel, the International Flower Bulb Center's area manager for Asia and Eastern Europe told guests, including Dutch Ambassador Baron De Vos van Steenwijk, at the opening of the center Thursday.

The International Flower Bulb Center is the brainchild of Dutch traders trying to boost sales by offering cheaper alternatives to cash-poor Russians - namely the option of buying flower bulbs.

"All over the world flower bulbs are snapped up as a cheaper alternative. They are something most people can afford," said Wendy Pelierman of the center's Asia and Eastern Europe division.

On average, a packet of 10 flower bulbs sells for $1.50 to $2.

However, even this could now be beyond the spending power of Russian consumers, warned Vladislav Korochkin, the head of NC Corporation, a major Russian importer of Dutch bulbs.

While Korochkin is cautious about the strength of the market, Boreel said he remains confident that sales in Russia will continue to boom.

"The Russian market really is ideal. It combines a temperate climate with an established garden culture," he said.

Moreover, traders believe that Russians have a pent-up need for flowers. In the Soviet Union, Russians were cut off from exotica like imported flowers and tulip bulbs under 70 years of Iron Curtain trade barriers. Carnations were imported from Poland and roses from Bulgaria, but they were only available to the Communist elite and sold in special shops to those in the ranks of Soviet officialdom.

Ordinary Russians had to make do by buying flowers grown in their regions only. Flower deficits caused by the restrictions of central planning were widespread. Inter-regional trade in flowers was banned and flower lovers used to wait in line for hours on end.

For many the arrival of colorful, imported flowers heralded the demise of communism.

"The first rays of political freedom were accompanied by the arrival of flowers from the West," said Tatyana Frenkina, an editor at Tsvetavodstvo, a monthly magazine devoted to flower growing.

And when the statue of Iron Felix Dzerzhinsky, the feared head of the Cheka security service, was uprooted from Lubyanka Square in the wave of pro-democratic euphoria of the early 1990s, Dutch tulip bulbs were planted where the monument once stood.

For now, as the Russian economy continues to stagnate, foreign flower importers look set to retain their presence on the Russian market.

As spending power for investment in projects such as building greenhouses dwindles further, it will still remain cheaper for Russian flower sellers to import rather than attempt to set up their own flower gardens in Russia, Frenkina said.

"We have the climate, we have the soil, the demand and a vast knowledge of horticulture. If we had the money, growing flowers for sale here in Russia could be big business," she said.