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Dutch horticulture energy crisis:

11 bankruptcies, more stoppers and mostly ornamental horticulture

The number of bankruptcies and business terminations without bankruptcy in Dutch horticulture did increase slightly in 2022, but large numbers of bankruptcies were avoided. This is the conclusion of researchers from Wageningen Economic Research. They conducted research into the impact of the energy crisis on the sector after MP Van der Plas tabled a motion on the subject. The Ministry of LNV commissioned the research.

Costs but also selling prices rose sharply and adjustments took place on many companies, both temporary adjustments in cultivation and also more permanent investments in energy saving. Particularly in the ornamentals sector, high energy prices have had a negative impact on income.

Bankruptcies, sharply lower than in 'banking crisis'
Less than 0.5 per cent of Dutch greenhouse horticulture companies went bankrupt in the period 2021 to the 1st quarter of 2023. These included seven companies in ornamental horticulture and four in food horticulture. Overall, the number of bankruptcies in horticulture is very low, say the researchers. "This is also true when the number of bankruptcies is looked at over a longer period of time. In the period 2016-2021, there were also relatively few bankruptcies in the vegetable sector: between 10 and 20 annually. The number of 11 bankruptcies is limited when compared to the period 2009-2013, in the wake of the banking crisis, when there were 80-90 bankruptcies per year."

About 4% of the companies have quit, but not all due to financial problems. It is estimated that around 50 companies quit without bankruptcy, but because of financial problems. These included 10-20 greenhouse vegetable companies and 30-40 ornamental horticulture companies.

These were mainly companies without cogeneration combined with a less favourable energy contract position when gas prices rose. These companies stopped for a variety of reasons, such as problems on
organisational level, lack of succession, problems with plant health and funding levels. The high energy prices put additional pressure on their decision to quit because the entrepreneurs could not or did not want to deal with the higher energy prices.

An approximately equally large group of 50 companies (like the 'cold stoppers' above 2% of the total number of companies), including
10-20 greenhouse vegetable companies and 30-40 ornamentals companies, stopped 'hot' by selling the energy contract positions that were worth a lot of money at the time. Among them just under a quarter of all Phalaenopsis companies. Almost all the 'hot stoppers' have been taken over by other companies. A few are considering (re)starting a company again later with the profits.

No effect of energy price increase for a quarter of the companies
Seventy percent of the companies have made adjustments, such as temporarily stopping, using less lighting or heating, or growing other crops. A quarter of the companies experienced no negative effect of the energy price increase, according to the researchers.

The researchers, like Minister Adema in his letter to the House of Representatives on 26 October, point out that the differences between individual companies are large. Adema writes: "Because of the large differences between greenhouse horticulture entrepreneurs and because of the period for which the indicators used were available, it was not possible to extend the research period up to and including the second quarter of 2023."

The researchers recommend keeping an eye on ornamental horticulture in particular. "For the time being, it seems that the signals are certainly not all on red, but it is recommended to monitor the ornamental horticulture sector in particular closely in the coming period and also keep an eye on whether or not greenhouse construction orders return to normal levels."