Economy

Lavender and lavandin encourage the development of the economic activity of Provencal and rural mountain areas. It also makes it possible to manage the space and maintain the landscapes which are a strong tourist advantage in these regions.

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Situation of the offer

The graph above shows the progression of the situation of the offer of lavandin essential oils. It particularly highlights the stabilizing effect of the quotas between the years 2000 and 2005, despite available volumes which increased to almost 2 000 tonnes in 2 years of consumption). The main lesson to be learned from this graph is that each time the offer exceeds 1 500 tonnes, the prices collapse.

This situation once again requires the setting up of regulation tools such as contractualization. At present, the main production operators wish to commit to this approach, targeting a 50 % contractualization of the production.

(Source : CIHEF/L’essentiel, avril 2010)

Competition

Multinationals, markets considerably oriented towards import-export, the explosion of communication methods and real-time dissemination of information, the absence of community regulations for agricultural productions upstream of the raw materials involved, result in the national and consequently the regional stakeholders are subjected to the harsh laws of competition and have little means of protection.

In a quite recent past, this competition was not seen in the same way according to where the operators were placed in the sector and it was mostly the producers of agricultural raw materials and the operators of first processing who suffered the most damage. Over the years, lavender essential oil and flowers repeatedly went through hard times.

Strictly from an economic point of view and without taking considerations of territorial planning into account, the sector has globally developed in as far as the imports involved raw products or with a low added value and which after being incorporated in more elaborate products, were re-exported mostly in the form of perfumes, medicine, cosmetics, etc.

Nevertheless with the development of world trade, relationships between producers and end users have been created, the trade circuits are shorter and the added value provided by the intermediary industrialists is partly or totally recuperated by the end user: in this way the problem of competition also arises for certain regional industrialists who see their dominant position on the world market threatened.