Commerce Commission investigating unapproved merger in New Zealand's flower industry

The price of Mother's Day blooms has soared with florists saying bouquets are costlier in the wake of the merger of New Zealand's two leading flower auctioneers.

United Flower Growers (UFG) and FloraMax merged on March 31. Some florists suggest the arrangement, combined with seasonal changes and periods of high demand, was creating noticeable price hikes.

One florist had even considered shutting up shop for Mother's Day, worried she would not be able to provide good value bouquets for her customers.

A Commerce Commission spokesman said the organisation was investigating the merger under section 47 of the Commerce Act to see whether it raised any competition issues.

"UFG and FloraMax were previously providing competing flower auction services to flower growers and buyers, including wholesalers and florists."

UFG and Turners and Growers Fresh Limited, which owned FloraMax, had not sought clearance from the commission for the transaction.

Key times of the year for florists are Valentine's Day, Mother's Day and Christmas.

With demand sure to rise and only a finite amount of flowers available at auctions, bidding wars meant retailers often ended up paying more for product at those times of year.

Amanda Browne of Victoria Park Flowers in Auckland's CBD said on top of that, she now only had one market to buy at - so if bidding got too high, she had nowhere else to go.

"In the past what I would have done is go to the other market to see what was happening there, but now you feel a bit stuck," Browne said.

She had considered closing for Mother's Day, worried she would not be able to produce quality bouquets at reasonable prices but had decided to soldier on, sometimes taking a loss on bouquets.

Browne estimated lilies and roses, both popular Mother's Day gifts, had each risen in price by about a third since this time last year.

"Definitely for Mother's Day, the prices are just out of this world," she said.

"I was selling lilies for about $6 a stem and at the moment if I sell them for what I should be selling them for it's $9.

"So if someone wants a bunch of lilies for $40, then that's four stems. I just put extras in... I make [the cost] up somewhere else."

Jo-Anne Moss of Best Blooms in Kingsland agreed that the merger had "exacerbated" Mother's Day price hikes - but she didn't think that was necessarily a bad thing for all involved.

"The New Zealand flower market has probably been underpaying for flowers for a long time," she said.

Growers, who had been absorbing rising power costs and increased rates for years, would benefit from getting higher prices at auction.

"It's not so good for the florists who are trapped in the middle, because it's hard for the customers to understand all that."

Moss said as an experienced operator she balanced out losses she sometimes made on bouquets by selling living house plants, which were more consistently priced and kept for longer.

UFG's managing director Bruce O'Brien told the Weekend Herald he was not able to comment on the matter while the investigation was ongoing.

However in an earlier statement on UFG's website, he was quoted as saying the merger would create "consistency and confidence to trading and processes across the whole country, to the benefit of all in the New Zealand cut-flower industry".