“Valentine’s Day is here again. A day for romance, a day for lovers, a day for husbands and boyfriends rushing to flower shops at the last minute before getting home,” says Tim Harcourt from the UNSW Business School.
“And with all great traditions, of course, there is a commercial side to it. No doubt, stockers of lingerie, chocolatiers will be in for a big day as well as the almighty florist.”
Professor Harcourt says the fact that roses and restaurant meals cost more on the 14th of February each year is basic economics: “Supply and demand, alas. We all want those dozen red roses. It’s a basic principle, found as far back as the 256th couplet of Tirukkural, and even Adam Smith in 1776 in The Wealth of Nations noted, where there’s demand, those holding the supply can charge more. It’s a simple economic equilibrium for price and quantity transacted. But take heart – that’s a real positive for the country as a whole.”
Tim Harcourt is the JW Nevile Fellow of Economics UNSW Business School and says that while Valentine's Day is a big day domestically, Australia will be doing well export-wise as well. If we take the big three – flowers, lingerie and chocolates – we can see some interesting trends boosting Australia’s bottom line.
In terms of cut flowers (for bouquets and floral decorations) Australia exported over $13 million last year. “Our major markets are The Netherlands – although surely we can’t send tulips there – Japan, USA, Germany and Switzerland. Australia’s unique flora, as well as our fauna, is an important part of the ‘brand’ of Australia. When consumers half a world away see Australia on a label, they know they get quality products.”
In terms of lingerie, Australia is having something of an underwear export revolution thanks to the great female lingerie brands and some men’s ones as well. But the exports of women’s lingerie still beats the pants off the men’s category in terms of volume, he says.
“Total exports of women’s lingerie include major destinations spreading from New Zealand, UK, Singapore, United Arab Emirates, Hong Kong and Singapore. But, oh la la, we have slipped in terms of our exports to France,” he adds. “We all know about the celebrity brands such as Kylie Minogue’s Love Kylie and Elle MacPherson’s Intimates, but there are a number of other female entrepreneurs cutting down the competition in the lingerie game. Many successful lingerie brands are run by women.”
Finally, chocoholics will be pleased to know that Australia exported a large slab of chocolate last year. “We all know Haig’s and Darrell Lea, and the many other specialty chocolate exporters that are doing their bit and succeeding at it. Australia’s top export destinations for the good stuff are New Zealand, Japan, Hong Kong, Singapore, The Philippines, China and Thailand along with the UAE.”
So, enjoy the sweet success of all our exporters this Valentine’s Day.
For further comment call Tim Harcourt on (02) 9385 3816, 0408 485 479, or email firstname.lastname@example.org.
The economics of love and loyalty: listen to UNSW's Dr Gigi Foster discuss how mainstream economics explains the many currencies of love.