Price Hike for Roses Ups Valentine's Ante

WASHINGTON – Among other repercussions, Congress' failure to pass an economic stimulus package may have an impact on your love life this Valentine's Day.

Those most affected will be romantics who are looking for the best prices on red roses – the signature gift for giving on Feb. 14.

A key duty exemption on flower imports and other products from Colombia, Ecuador, Peru and Bolivia – the primary exporters of flowers to the United States – has lapsed because its reauthorization was included in an economic stimulus package that died after months of partisan squabbling.

"We had hoped Congress would have signed that bill in January and it never happened," said Barbara Ergo, director of wholesale rose purchasing for 1-800-Flowers. "(Miami importers) have suggested we write our congressmen."

Congress passed the Andean Trade Preference Act in 1991 in an effort to discourage the production of illegal drugs by reducing trade barriers to other products.

Since the elimination of the import duty expired Dec. 4, excise taxes on South American products have jumped close to 7 percent. This translates into an average $2 hike for each box filled with roses or other flowers, said Ergo.

Importers in Miami, the major port of entry for flowers coming in from those countries, estimate a huge increase in costs for importers this year as a result of the added duty.

Miami imported $465 million in flowers imports in 2001. Based on that number, the import duty should tack on an additional $2.5 million this year, said Lin Watts, executive vice president of the Association of Floral Importers of Florida.

But thanks to a number of importers who have decided to absorb the cost in anticipation that Congress will pass the reauthorization of the ATPA soon, not all florists are being hit with the wrong end of cupid's arrow.

"Compared to last Valentine's Day – in all of our discussions with 95 percent of our florists and wholesales in the last couple of weekends – they haven't seen a great increase in prices and are holding back on passing any increase onto consumers," assured Jennifer Sparks, vice president of marketing for the Society of American Florists.

But importers and wholesalers are feeling the pinch this Valentine's Day. The increased tax has certainly put a bee in Shane Garrett's bonnet. Garrett, CEO of JustFlowers.com and owner of a small florist shop based in Los Angeles, said he has raised prices $5 over what they would normally cost for Valentine's Day.

"It's really hurt profit margins," he said, complaining he has had to renegotiate contracts with wholesalers. Since his online service works with 34,000 florists across the country, he said he thinks he has a pretty good picture of how the additional taxes have hurt them.

"I'd say about 80 percent of florists raised their retail prices," he said. "It really did hurt Valentine's Day, I think."

Some florists said they were not aware of the hike but expected prices at this time of year to increase anyway. In turn, customers are used to paying more for the object of their affection.

"There is always an increase – we just know that it's supply and demand," offered Bonnie Henninger at Henninger's Florist Shoppe, a family-run business in New Britain, Conn. Typically, a $45 dozen of roses fetches $60 during Valentine's week, she said.

"I end up paying double during Valentine's," said Brenda Taylor, owner of Brenda's Bloomers in Cape Neddick, Maine. "I'm seeing higher prices now, but I'm not sure exactly why that is." Taylor said she sees price hikes during both the annual Parade of Roses and Valentine's Day.

Meanwhile, members of Congress are lobbying to get the ATPA reauthorized quickly. A spokeswoman for Sen. Bob Graham, D-Fla., said a move is afoot to get the bill passed independently of other legislation.