Why Christmas trees are so much cheaper in Europe than in Canada
Every year at the end of November, a spectacular Christmas tree is erected in the central square of Padua, Italy.
With lots of baubles and glowing lights (and neon-lit signs from this year’s corporate sponsors), it doesn’t just mark the official start of the holiday season. At more than 20 meters high, it is quickly becoming a local landmark and a beacon for tourists who have lost their bearings in the city’s medieval streets.
An exquisite Nordmann fir like this, grown over more than two decades, can cost a city more than $200,000 for harvesting, transporting and decorating. Not everyone buys 20-meter trees, but it wasn’t long ago that this variety was so popular in Europe that the then chairman of the Danish Christmas Tree Growers’ Association called it “the Rolls-Royce of Christmas trees.” able to fetch twice the price of other, cheaper varieties.
But today, across the street from Padua’s shimmering tree, a six-foot-tall Nordmann fir can be found for the rock-bottom price of 15 euros ($22), bundled in the corner of a dimly lit grocery store.
This fact suggests that something is changing in Christmas tree prices in Europe have largely fallen over the last decade – in stark contrast to Canada, where the average price is in some regions for a 1.8 meter tall tree it costs $75 or more.
Although it can be difficult to get concrete data on European Christmas tree markets, this still seems to be the case Shrinking forestsDue to the fact that the trees are smaller farms and more people need to be served, they are now much cheaper than those in Canada. Why?
A vicious circle
As in Canada, only a few regions in Europe are responsible for the majority of Christmas tree production.
Quebec, Ontario and Nova Scotia dominate the Canadian industrywhere 80 percent of the country’s Christmas trees are produced. In Europe, Denmark and Germany lead the way, producing almost half of the trees sold on the continent.
Growing a Christmas tree looks romantic on screen, but in reality it’s a brutal affair.– Jay Zagorsky, economist at Boston University’s Questrom School of Business
Historically, these producers in both places are actually many small farms, growing trees on just a few dozen acres of land. Finally, Christmas trees are a good sideline for farmers with fallow land, a slow-growing crop that provides agritourism in the off-season.
“In Austria you can live on two hectares of Christmas trees,” said Claus Jerram Christensen, managing director of the Danish Christmas Tree Association. “You add a few sheep and a family can live on that.”
That means: “When there are good prices, there are more producers,” Christensen said. Farmers are jumping on the bandwagon and setting up a few stalls to capitalize on the high demand.
But trees like the Nordmann firs take almost a decade to reach maturity.
“Eight to 10 years later … we just have too many trees,” he said. “Prices are going down and people are saying it’s no longer a good deal.”
“Christmas tree growing looks romantic on screen, but in reality it’s a brutal business,” said Jay Zagorsky, an economist at Boston University’s Questrom School of Business. “You have a relatively fragmented industry … (with producers) making independent decisions many years into the future while making low profit margins.”
If you do that, he says, there will be big price fluctuations.
In other industries facing similar problems, Zagorsky says the solution often lies in consolidation – the emergence of larger players who can absorb more losses due to fluctuating supply.
It seems that this trend is in full swing – and the 15 euro trees in the supermarket in Padua are just one example of this.
“It was a market shift,” Christensen said. “The large retailers are taking more market share from the smaller stakeholders, who are often older people who find it difficult to get their children to take over.”
In the 20 years he has been running Bastien Christmas Tree Farm in Essex, owner Ovide Bastien says he has increasingly witnessed climate change first hand. To combat this, Bastien has grown climate-resistant Christmas tree varieties and used a special coated fertilizer that does not evaporate and lasts longer. But Bastien says that means higher input costs.
This challenge is exacerbated by European Union policies that exclude most Christmas trees from agricultural subsidies. Faced with intense competition for land, many small farmers are abandoning tree cultivation to pursue more profitable pursuits.
In Canada, many small operators also find it difficult to plan for succession, resulting in a shrinking supply.
“The (average) age of a Christmas tree grower is between 65 and 85,” said Shirley Brennan, executive director of the Canadian Christmas Tree Growers Association. “We lost 20,000 hectares of Christmas trees in ten years – and that was entirely due to retirement.”
Unlike Europe, where demand is relatively stagnant, Canadian demand for Christmas trees is surging at the same time supply is shrinking.
In the last 10 years alone, the value of the Canadian market has increased from $53 million to $160 million.
“We couldn’t have predicted this,” Brennan said.
Who will take over the business when the Christmas tree farmers retire? According to Statistics Canada, the average age in the industry is 59 – about 14 years older than the average Canadian.
Canadian farmers are also facing other price pressures: rising equipment and fertilizer costs have driven up inflation across the economy.
“Demand is going up and prices are going up, but so is everything else,” she said.
How tariff threats could affect tree prices
That probably won’t change any time soon. Zagorsky points out that new US President Donald Trump’s proposed high tariffs on Chinese goods would skyrocket the cost of plastic trees in the US, which have been gobbling up the market for real trees for decades and are now found in China more than three-quarters of US households.
If that happens, he said, “there will be a big shift toward fresh trees. And where do many of our fresh trees come from? They’re from Canada.”
In Europe, however, the floods of recent years appear to have divided the market. Wholesalers and chains offer discount trees for next to nothing – less than 20 euros in most stores – while smaller farms like Azienda Agricola Berton Giuseppe in Padua can charge more than three times the price for the same variety.
But Giuseppe Berton, the owner, says they can make their sales based on a quality guarantee.
“The grocery stores take the trees that are really trash, used stuff,” he said. “It’s a whole different quality…They don’t really compete with us.”
It’s a strategy that finally seems to be working. European trees are still a long way from Canada’s prices – but after a decade of decline, the average cost of a tree is expected to rise by a few euros this year.
“We’re still at the bottom of the curve,” Christensen said, “but we’re heading in the right direction now.”
