The Love Tax: Likely new EU duty on flowers from Kenya

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DSC_2326Made In Kenya

The Issue

After a break down in discussions, it has become increasingly likely that imported cut flowers from the East African Community, which includes Kenya, will be shackled with a 5-8.5% tax.  The new tax is set to come into effect in just over a week on the 1st of October.

Unfortunately, it is only flower imports from Kenya that will face the new tax, as the other countries in the EAC are protected by virtue of the fact they are ‘Least Developed Countries’, and consequently can export to the EU tax free.  As a result of this tax, imported Kenyan flowers will become more expensive, and so Kenyan growers will find it difficult to compete with cheaper alternatives.

Given that the majority of red roses bought in the UK originate from Kenya, this new EU tax will hit romantic Brits in their wallet at a time when they can least afford it; not good news for wannabe paramours.

The Size of the Market

According to Fairtrade.org.uk “More than 500,000 people, including 90,000 direct flower employees, depend on the flower industry for their livelihoods. The cut flower industry has become Kenya’s second most important foreign exchange earner, producing exports worth almost €360 million annually” (Taken from http://www.fairtrade.org.uk/en/media-centre/news/september-2014/eu-import-duties-on-kenyan-flowers-threaten-future-of-fairtrade-producers).  This concentrated and targeted blow to such an integral part of Kenya’s economy could have devastating effects.

How is Fairtrade Involved?

Fairtrade has worked tirelessly to ensure that many flower farmers in Kenya receive a fair income for their flowers, and in that vein “44% of all cut roses produced in Kenya now come from Fairtrade certified farms” (from http://www.fairtrade.org.uk/en/media-centre/news/september-2014/eu-import-duties-on-kenyan-flowers-threaten-future-of-fairtrade-producers).  This Fairtrade certification has resulted in investment in ‘education, better housing, healthcare and infrastructure such as roads.’  To impose this thoughtless tax would be to halt, and potentially degrade, the substantial progress made so far.  Therefore Fairtrade is calling on all parties involved to cooperate and come to an agreement, so that the damaging import tax is not imposed, and the integral investment in Kenya’s economy can continue.  Please see Fairtrade’s official comments here: http://www.fairtrade.org.uk/en/media-centre/news/september-2014/eu-import-duties-on-kenyan-flowers-threaten-future-of-fairtrade-producers

Arena’s View

At Arena Flowers we source stems from many countries and many growers, to suit the differing needs and price expectations of our customers; seasonal British flowers, many varieties from expert Dutch flower farms and, also, Kenyan Fairtrade roses.

Arena is a proud member of Fairtrade. We source over a million stems per annum from Kenya and our team visits Kenyan farms several times a year. We believe that any tariff would be a hugely retrograde step and that it would have a direct deleterious effect on the flower growing worker communities in Kenya that depend on the EU’s continuing support and trade for their daily income. There is no doubt that if this tariff is imposed, Kenyan workers will be the ones to pay the price. We join Fairtrade in urging the EU to come to an agreement with the EAC as soon as possible to avoid this unnecessary and punitive tariff. 

UPDATE: There has been no official progress announced, and as a result Kenyan farmers must prepare themselves for the imposition of this damaging and unnecessary EU tax. Please see details here.

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