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International Flower Networks: Transparency and Risks in Marketing Channel Choice

  • Wijnands, Jo H.M.
  • van der Lans, Karin
  • Hobbs, Jill E.

Two thirds of Kenyan cut flowers are marketed through Dutch flower auctions, while the remainder is marketed directly to retailers. Auctions do not restrict the volumes marketed; however price determination is based on a spot market. A Transaction Cost approach is used to investigate the differences in marketing costs between the channels. The results suggest that there are no differences between the channels in terms of uncertainty about prices, finding buyers or transparency of quality standards. Auction growers pay a higher marketing fee but they have significantly fewer office employees and flower varieties compared to growers who market directly.

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File URL: http://purl.umn.edu/7759
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Paper provided by European Association of Agricultural Economists in its series 99th Seminar, February 8-10, 2006, Bonn, Germany with number 7759.

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Date of creation: 2006
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Handle: RePEc:ags:eaae99:7759
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  1. Jill E. Hobbs, 1996. "Transaction costs and slaughter cattle procurement: Processors' selection of supply channels," Agribusiness, John Wiley & Sons, Ltd., vol. 12(6), pages 509-523.
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