The Members’ Council approved the 2024 rates for members last Thursday, December 7. The rate proposal for members of the Royal FloraHolland Board of Directors incorporates input and feedback from the Members’ Council and the Finance Committee. The board decides on the rates applicable to non-members. “At the end of September, we sent an advance announcement about the proposed rate increases for members to enable you to prepare as a member,” the Royal FloraHolland team says.
Big annual cost increases
In recent years, the company rate increases have lagged behind the rise in their costs and inflation, they say. Royal FloraHolland’s costs have increased rapidly over the past two years, more than its revenues. With inflation, collective bargaining agreements, and higher energy bills being the main causes.
Cost control is important
They continuously aim to make cost savings and avoid cost increases. “Together, we need to avoid being in the red for prolonged periods in the coming years. This is why we have been implementing specific large-scale measures in our organization for some time now with a view to controlling costs. Implementing them will take time. We have included specific targets for cost control in our 2024 budget,” they say.
Need to invest
They are increasing our investments in Floriday and in digitization to become the leading digital floriculture platform internationally. We also invest in sustainability and real estate development and maintenance. Ultimately, the cooperative and the sector as a whole benefit from the necessary investments we are now making in Floriday, our IT systems, processes and real estate.
Key adjustments to rates in 2024
- – The fixed element of the membership fee will be €600 for main numbers and €300 for sub-numbers. This means contribution fees will be proportional to the costs incurred for each member, regardless of the size of that member. These costs include, for example, lobbying, administration, communication, and system/IT costs.
– Variable contribution rate: the rate is increased slightly from 0.5% to 0.6%. The maximum turnover threshold is increasing from €1,050k to €1,100k. - Introduction of member packs with different sales commissions per pack per sales method. We accommodate differences between members with the packs: Direct focus, Direct flex, Auction flex, and Auction focus.
- Increase of 6.3% on average in rates for various logistics supplies.
- Increase of 7.8% in rates for logistics services
- Introduction at Connect Logistics of a ‘buyer not open’ rate of €2.44 (cold storage) and of €1.46 (not cold storage). If delivery is not possible because the buyer cannot take delivery of the batches.
- The auction cart levy will be €12.13 (previously €11.25), the direct cart levy will be €3.16 (previously €2.93), and the clock batch levy will be €1.96 (previously €1.82)
- Adjustment of buyer-concentration discount. This discount is henceforth available only to members of the Direct focus membership package who are turnover-dependent on a limited number of customers. If 80% of your total sales comes from your three largest customers, then you get a concentration discount of 0.3% on your total sales.
- The fee for member financing certificates will be 2.8%.
- Adjustment of volume discount (graduated scales). Your volume discount increases as your turnover increases. Since 2018, the volume discount by revenue category has remained the same, while inflation and member consolidation continued to cause the cooperative’s costs to rise sharply. It has, therefore, been decided to adjust the limits for the volume discount, or the graduated levels, in 2024. The top tier will be lowered from 0.7% to 0.6%. Furthermore, the volume discount also varies by member pack.
The new volume discount tiers are:
€1-3M will change to €2-4M
€3-10M will change to €4-12M
€10M will change to >€12M