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Belgiums greenhouse veg auctions looking to merger

Collaborations and mergers in the Belgian fruit and vegetable sector have been following one and another in rapid succession recently. The latest merger was at the beginning of this year, when it was announced that the Mechelse Veilingen and Coƶbra merged into BelOrta. Now a declaration of intention has been signed by BelOrta, the largest cooperative vegetable auction in Europe, and fruit auction Borgloon. If all goes according to plan, and 75% of the growers agree to this, the merger will be completed at the end of this year. "A historical moment," declares Jos Craemers, director of Veiling Borgloon.

100% input
Although BelOrta indicated that consolidation was their main aim at the beginning of the year, their growth does not seem to have stopped this year. "We certainly want to grow step by step, but this went a little faster than expected," says Filip Fontaine, one of BelOrta's directors. BelOrta's other director, Chris de Pooter adds: "We are only seven months into a merger, but when an opportunity arises and the time is right, we have to push through. But we are only talking to one party, and this is stated in the merger declaration. Of course, we don't know what will happen next year. Everything happens gradually. We are now focussing 100% on making this merger succeed. Two years ago, we never thought that we would be doing this. As far as market share is concerned, we can strengthen each other, in fruit as well as vegetables."



Historical moment
On the 29th of July the press conference with both auctions took place. "Today may be a historical day for these companies," said president Pierre Vrancken of Veiling Borgloon. "Months ago we received the offer from BelOrta to discuss things together. In the Board of Directors meeting we had spoken about the future and a possible strengthening. Both company's Board of Directors sat down together and there was also contact between the managements. After long discussions we worked on a declaration of intent together and told the management to finalise it." 

New concept

Jos Craemers then illustrated the declaration of intention and the presentation was named: 'The best of two worlds in a new concept'. He indicated that the policies of both auctions can be seamlessly integrated, that they have the same thoughts on the most important matters and that product bundling is the main goal. "When the merger is complete, the name BelOrta will be kept. The market share of the product that we will market under BelOrta in the future looks good compared to the other Belgian auctions. For tomatoes for instance the market share is 67%, for chicory 69%, 89% for asparagus and 97% for aubergines. The market share in strawberries will be 22%. In the future we will market a third of the Belgian pear production, a quarter of the apple production and 60% of the soft fruit."



The future market shares

Not export ourselves
"We have heard that our customers don't have much time and want to receive the products quickly. One-stop-shopping is not an uncommon concept in our sector. We are focussed on Belgian retail and Belgian export trade, in which both auctions have built up a striking position. We work exclusively through the existing Belgian export trade, and do not want to export ourselves. Because, and I speak for both parties, we do not want to come into competition with our own customers."

"As far as clock sales are concerned, BelOrta and Borgloon clearly have the same strategic vision. The clock remains the central item for the price formation of the products, supported, of course, by mediation. For the growers it's important that we keep the family feeling. This is our basic principle: the grower is not a number, they have a name."

Flandria and Eburon
"We have the oldest fruit quality label in Flanders: Eburon," continues Jos Craemers. "We can and will place this brand under the umbrella of Flandria, the best known brand in Europe for fruit and vegetables. All doors open to Flandria nowadays and Eburan will profit from this from now on. With a collective 400 million Euro turnover we have economies of scale and can speak of a dominant position on the market. For growers this will bring a 20 to 40% reduction in cost price and strengthen their liquidation position. GMO is also an important item. The goal of GMO is to create collaborations between growers unions, so we're making history today. Other things that will be worked out in the future include organic production. We are both strong parties who found each other. Two financially healthy business with mutual respect."



Other fruit auctions

There have been talks between the BFV, Veiling Haspengouw and Veiling Borgloon in the past. According to president Pierre Vracken there is a huge difference in mentality between the various Belgian fruit auctions. Jos Creamers: "These conversations were mainly about the problems around the Jonagold, but some of our colleagues interpreted this differently. We never said that we were getting together. Today, it's all about the presentation of a brand new concept and we want to sketch out the complementarity and advantages of this. As Veiling Borgloon we took the lead and hope that this will be an inspiration for the whole sector. It's a good decision for everyone."


From left to right: Jos Craemers (Director of Veiling Borgloon), Chris de Pooter (Director of BelOrta), Pierre Vrancken, (President of Veiling Borgloon) Johan Creten (Vice-president of Veiling Borgloon) and Filip Fontaine (Director of BelOrta)

75% of the growers must approve of merger
The merger committee has now been set up and step by step the various matters considering the merger are being taken care of. Chris de Pooter: "A lot has to be done, and at the end of it there will be a merger report with all the details. We expect there to an extraordinary General Assembly in December, at which the growers will have the last word. We want to have this group of people behind us and 75% have to approve of the merger, or the plan will fall through. If everything goes according to plan the merger will be finalised at the end of 2013."

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