Members' Council: rates for 2021 and temporary international NAT exemption16 December 2020
On 10 December 2020 – Royal FloraHolland Cooperative Day – Members' Council met for the last time for this year. The Members' Council approved the rates for 2021. We also voted on a temporary exemption for the NAT basic commission fee on international trade lanes. In addition, the agenda included Royal FloraHolland's real estate plans.
Rates for 2021 approved: What will change?
Members' Council approved the rates for members. There are only limited changes in 2021. Broadly speaking, the following will change:
- The lot and trolley levy will be indexed by 2%.
- The reward for using several transfer codes will be decreased with one or two cents.
- The rental rate for deposit shelves will be raised in order to better cover operational costs.
- The rental structure for multiple-use flower buckets and racks will be adjusted.
- Unsold A1 quality will be charged through, and the unsold rate will be increased to cover costs. Growers and not the collective will thus pay the costs of unsold products.
The rate structure will probably change in 2022. This will be necessary in order to incorporate Royal FloraHolland's new services into the existing structure and to create a membership model that works for different kinds of growers. The Membership Leading Team will be organising the second round of consultation sessions in January.
Temporary NAT commission fee exemption on specific international trade lanes
The Members' Council also voted in favour of a proposal for a temporary exemption on payments of the NAT basic commission fee. Any member with trade on an international trade lane where Royal FloraHolland cannot (or not yet) support payment will be eligible for this exemption.
This concerns trade lanes outside the SEPA zone. SEPA stands for Single Euro Payments Area. SEPA is the standard payment service for transactions within Europe, with 36 participating countries.
The exemption will be temporary until new financial services have been developed for these trade lanes. As soon as these have been rolled out, including the option of payment through Royal FloraHolland, then the exemption for that trade lane will lapse and the NAT levy will be payable.
A pre-condition for the temporary exemption is that members allow complete transparency regarding their NAT flows, a requirement that applies to every member. Members' Council advised that international members who receive an exemption do everything in their power to ensure that buyers on the trade lanes which are not yet supported sign up with Royal FloraHolland and Floriday in the future.
The decision is important because we see that market conditions are changing rapidly. That makes it of the greatest importance that we as a collective retain our market share.
This was a difficult decision for the Members' Council because there were arguments for and against the proposal. The determining factors were the importance of retaining members and the scale of our market. Scale is crucial to Royal FloraHolland's platform strategy. Ultimately, after careful consideration, a majority of the Members' Council voted to support the proposal.
Do you want to know more about the background reasoning?
Real estate plans
Members' Council also discussed Royal FloraHolland's real estate plans, an important topic since more than half of Royal FloraHolland's balance sheet consists of real estate and related assets. Rollout of the strategic plan and new logistics create different real estate requirements. Some locations will need to be revamped or expanded, others reduced in size.
Sale of buildings and properties
For these reasons, we are also looking into the options of selling buildings, and the sale or ground lease of properties that Royal FloraHolland itself no longer needs, as long as these meet the assessment criteria. The criteria (frameworks and principles) are being discussed with the Members' Council.
The Members' Council thinks it's a good idea to take a close look at our real estate. They support the notion of active follow-up and making the plans more concrete. Not taking decisions and doing nothing also costs money. Members' Council suggested that we space out any sale of property segments, and to proceed very carefully with any modifications to the land-use plan, should this arise. The basic point of departure should always be maintaining Royal FloraHolland's control of physical marketplaces.