Produce Auction Houses – A race against the clock

10th October 2017

Back in the good (?!) old days selling fruit and vegetables via auction houses was extremely common. Dutch horticulture companies have been using an auction model to manage intercontinental trade from around the late seventeenth century. It allegedly started with the tulip market.

Legend then has it that a grower called Jongerling was looking for better returns on his crops (aren’t we all!) and decided to trial a new way of selling his cauliflower that would encourage competition among his customers and would hopefully push the price up. This propelled the Dutch auction method into the produce market. Around the same time as Jongerling formed his plan German fisheries also started using a similar method of selling, reportedly in order to maximise time at sea and minimise time spent bartering.

In the flower industry the Dutch auction houses remain extremely important. Aalsmeer in the northern Netherlands is home to the largest flower auction in the world (the auction house is named after its location) and flower growers from Africa, South America and Europe send their flowers there to be sold. Most days twenty million flower stems pass through Aalsmeer with a 15% rise around Valentines and Mothers’ Day. It follows the traditional Dutch system of the price going down against the clock with only seconds to buy the flowers at each price.

Globally, fish markets are also still often run as auctions. In the UK Grimsby is the most important fish market and it runs as an auction. Slightly further afield the Sydney Fish Market has been using the dutch auction system since 1989 and the tuna auction at the Tsukiji fish market in Japan has become a (controversial) tourist attraction.

For fruit and vegetables however the auction markets have become rarer and rarer.

Italy is home to one of the traditional auction houses for produce which has a particular history and heritage linked to the produce of the land where it stands. The radicchio auction at Chioggia produce market was created in 1972 after the informal trading post at nearby Sottomarina became too small for purpose. The market originally welcomed a diverse range of product from one thousand five hundred farms but it quickly become a market specialising in a monoculture – radicchio.

The most notable thing about the Chioggia market is that it is not a dutch auction. Instead it keeps alive the traditional method of auctioning goods in the Veneto that has been used since Medieval times. It is a whispered-bid auction. Incredibly to this day customers will whisper in the salesman’s ear the amount per kilo they will pay for the product. Even more incredibly this whispered-bid auction (‘l’asta all’orecchio’ in Italian) in the morning often sets the price for radicchio throughout the whole of Europe in the winter months. So, next April as the traditional radicchio shortage sets in and the market prices shoot up, remember where it all starts!