Why Christmas trees in Europe are so much cheaper than in Canada

Every year, in late November, a towering Christmas tree is erected in the central square of Padua, Italy, marking the start of the holiday season. This tree, adorned with baubles, sparkling lights, and neon signs of corporate sponsors, quickly becomes a local landmark. Standing more than 20 meters tall, it serves as a beacon for tourists navigating the city's medieval streets.

A tree of this size, a Nordmann fir that has been nurtured for over two decades, can cost a city more than $200,000 for harvesting, transportation, and decoration. Not long ago, these firs were highly sought after in Europe, with the head of Denmark’s Christmas tree growers' association referring to them as "the Rolls-Royce of Christmas trees," capable of fetching double the price of other varieties.

However, across the street from Padua's sparkling tree, you can find a two-meter (6½-foot) Nordmann fir being sold for just 15 euros ($22), tucked away in the corner of a dimly lit grocery store. This shift signals a change in Europe, where Christmas tree prices have been decreasing for nearly a decade. In contrast, prices in Canada are rising, with some regions seeing average prices of $75 or more for a six-foot tree.

Although data on Europe's Christmas tree market is limited, it appears that despite shrinking forests and more people entering the market, trees in Europe are now much cheaper than in Canada. The reasons behind this difference are complex.

In both Canada and Europe, a few regions dominate Christmas tree production. Quebec, Ontario, and Nova Scotia account for 80% of Canada's Christmas trees, while Denmark and Germany lead production in Europe, contributing to nearly half of the trees sold across the continent.

Christmas tree farming may seem idyllic, but it is a challenging industry. Many small-scale farms grow trees on just a few dozen acres, and for some farmers, Christmas tree production serves as a side business. "In Austria, you can live off two hectares [five acres] of Christmas trees," said Claus Jerram Christensen, managing director of the Danish Christmas Tree Association. "You add some sheep, and a family can live from just that."

However, trees like Nordmann firs take almost a decade to reach maturity. "Eight to 10 years later, we have simply too many trees," Christensen explained. "The prices decline and people say this is not a good business anymore."

Jay Zagorsky, an economist at Boston University's Questrom School of Business, noted that the Christmas tree business can be volatile, with independent growers making decisions many years in advance on slim profit margins. This leads to large fluctuations in price.

Zagorsky also pointed out that in industries facing similar challenges, consolidation often helps larger players absorb the losses caused by fluctuating supply. "The big box stores are taking more market share from the smaller stakeholders, which are often elderly people for whom it's difficult to get their children to take over," Christensen added.

In Europe, small farmers are struggling with policies, such as those from the European Union, that exclude Christmas trees from agricultural subsidies. The competition for land has led many farmers to abandon tree farming in favor of more profitable ventures.

In Canada, smaller-scale producers are also finding it difficult to plan for succession, contributing to a shrinking supply of trees. "The [average] age of a Christmas tree farmer is between 65 and 85," said Shirley Brennan, executive director of the Canadian Christmas Tree Growers Association. "In 10 years, we lost 20,000 acres of Christmas tree farming due to retirement."

Unlike Europe, where demand for trees remains steady, Canada's demand is growing rapidly. The market value in Canada has surged from $53 million to $160 million in the last decade. "We couldn’t forecast that," Brennan said.

Canadian tree farmers face additional pressures, including rising costs for equipment and fertilizers. "Demand is going up and prices are going up, but so is everything else," Brennan added.

U.S. tariffs on Chinese goods, proposed by President-elect Donald Trump, could further increase prices for artificial trees in the U.S., shifting more people toward fresh trees. Many of these fresh trees are sourced from Canada, potentially boosting the Canadian market.

In Europe, the past glut of trees has split the market. While some wholesalers offer discount trees for under 20 euros ($30), smaller farms, like Padua's Azienda Agricola Berton Giuseppe, charge significantly more for the same variety. Giuseppe Berton, the owner, emphasizes that quality is key: "The grocery stores take the trees that are truly scraps, second-hand stuff. It’s a completely different quality … They don’t really compete with us."

This strategy seems to be working, as the price of European trees, after years of decline, is expected to rise slightly this year. "We are still in the bottom of the curve," Christensen said, "but we are going in the right direction now."