chiquita banana
TRANSCRIPT
Chiquita Brands International
09PGDM004 Aman Gupta09PGDM016 Divya Sajja09PGDM027 Niraj Todi09PGDM038 Rahul Bhatia09PGDM049 Sonal Goel09PGDM060 Vishnu Sankar
Group-4, Section A
Banana – Fact Sheet
• Globally one of the most commonly eaten fruit with India being the largest producer.
• World’s fourth most important crop after rice, wheat and maize
• Tropical climate most suitable for banana growth
• One fifth of world production exported from developing to developed countries, an example of South – North trade
• Just 20% of bananas are traded on the world market, the rest are used for domestic consumption
Latin American countries
ACP Countries EU Countries
Ecuador Cameroon Martinique
Costa Rica Ivory Coast Guadeloupe
Colombia Dominican Republic Canary Islands
Guatemala Belize
Honduras Surinam
Panama Jamaica
Brazil Ghana
Peru Windward Islands
Nicaragua
Major Banana Exporting Countries
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
Map of banana Trade flows (2002)
BACK
Banana Exports - Major Countries 2002 - 2004 (Average)
Latin America – Lots at Stake
Latin America – 80% of the total Exports
US & EU – largest importersBanana Imports - Major Countries
2002 - 2004 (Average)
US and EU – accounts for 75% of total imports
Banana Trade• Controlled by large US and Europe Multinationals
• 6 Companies control 85% of the international banana trade Dole – California, USA Del Monte – Florida, USA Chiquita - Ohio, USA Fyffes - Ireland Noboa - Guayaquil, Ecuador Geest - UK
• Chiquita - a leading player since 1889
Chiquita formation and evolution
1870
•Lorenzo Dow Baker and the Bostonian entrepreneur Andrew Preston join efforts to develop a banana market in Boston.
1871
•Henry Miggs undertakes railroad contract in Costa Rica. Plants bananas to feed workers.
1885
•Baker and Preston establish Boston Fruit Company
1890
•Keith exports bananas from the Costa Rica plantations.
•Keith gets 800,000 acres of tax-free land from government of Costa Rica as it defaults on payments.
Chiquita formation and evolution
• Dominated the banana trade in Central America and along the Caribbean coast of Colombia.
• Assets included plantations, railways, ports, ships and communication networks in Columbia, Honduras, Nicaragua, Costa Rica, Panama, Jamaica.
1897
•Keith enters banana business in Panama
1899
•Keith, Preston and Baker together establish United Fruit Company.
•Expansion in Cuba, Honduras, Dominican Republic, Guatemala, Haiti
Chiquita Growth• Invested in major infrastructure facilities
• Built villages with homes, schools, medical facilities, and factories to support its workforce.
• First to ship its cargo in refrigerated vessels
• First to brand bananas by labeling them with stickers.
• In 1994, created a memorable marketing campaign with Miss Chiquita and “Chiquita Banana Song”
• Termed as “la pulpa” or Octopus - spread of US political and Economic hegemony in region.
• Acquisition of companies- included competitors in US as well as in Latin American countries.
• Exploitation of workers - Poor working conditions. Curbed unionism using its own private army
• Wielded disproportionate power over countries which got called as “Banana Republics”
Extension of Power
Chiquita Controversies• 1911-12- Sent Marines into Honduras
• 1928- Banana Massacre in Columbia- Shooting of striking UFC workers in banana plantations.
• 1952- Overthrow of Guatemala democraticgovernment
• 1974- Bananagate- Bribing of Honduranpresident
• 1998- Cincinnati Enquirer controversy
• 2008- Alleged Payment to Columbian paramilitary groups
• Treaty of Rome , 1957 - Adopted Common Agricultural Policy (CAP)
• Lome Convention, 1975 - Preferential access to banana imports from developing countries in the ACP region
• Germany remained free market since it had no colonies of its own
• Stated Reason : To help less efficient growers in these regions to compete with the U.S multinationals
• Real Reason: Protect EU multinationals Secure the German market
Banana Politics of EU
Banana Industry in early 1990s
40%
35%
15%
10%
World imports by volume
ECNorth AmericaJapan and other Asian ConutriesRest of World
75%
20%
5%
Global Shipments by volume
Latin AmericaACPOthers
Banana Import Policy - 1993
• Effective on July 1993
• Divided banana imports into 4 Categories :
Third Country Imports (Latin American and non-ACP sources)
Traditional ACP imports
Non Traditional ACP imports (exceeding the traditional quota amounts)
EC imports
Restrictions
Third Country imports
Traditional ACP imports
Non Traditional ACP imports
EC imports
2 million ton quota
Free access 2 million tonne quota free of duty
30% share of “third country” imports
in quota volumes dutiable at 100 ECU/mt
Above it 750 ECU/mt
Excess dutiable at 850 ECU/mt
Licensing provision
Licensing provision
Two Panels under GATT
• 1st Panel- initiated on 8th Feb 1993 by Colombia, Costa Rica, Guatemala, Nicaragua & Venezuela against the national regimes concluded in May 1993 when national regimes disappeared
• 2nd Panel - initiated by same 5 countries, against the EC common banana market on 28 April 1993 conclusions - inconsistencies in specific duties on banana
imports, preferential tariff rates to ACP countries, allocation of import licenses
EC cannot discriminate between the GATT contracting parties - ACP and Third country banana exporting countries
• Despite this, 4 countries, excluding Guatemala signed the Banana Framework Agreement
Banana Framework Agreement• Four complaining parties - Colombia, Costa Rica, Nicaragua
& Venezuela reached an agreement with EC
Not to request adoption of the panel
Permitted to issue export certificates
Quota expanded to 2.2 million tonnes from 2.1
Country specific quotas as follows
Country ShareCosta Rica 23.40%
Colombia 21%
Nicaragua 3%
Venezuela 2%
Others (1995) 46.51%
Dominican Republic and other ACP countries concerning non-traditional
quantities90,000 tonnes
Germany’s Banana Love
• Pre Reunification
– Post World War II, bananas symbolized luxury to both West and East Germans.
– Special Provision "Protocol Number 10” in Treaty of European Economic Community (EEC) – unlimited access
– Post Lome Convention, Germany was the only free market in Europe.
Germany’s Banana Love
Germany36%
UK13%
France13%
Italy15%
Belgium5%
Nether-
lands4%
Other Europ
e14%
% Volume of Banana Trade in 1991-92
• Post Reunification – 1989– West Germans referred Eastern countrymen as “Bananen”.
– By 1992, Germans, consumed twice as many bananas as do citizens of any other EC nation
– With no colonies, wanted special, duty-free treatment for German banana imports
– EC ‘s “banana split”, exposed the sharp political tensions underlying the move toward a single, borderless European market.
– Germans preferred Latin American “DollarBananas”-to “ EuroBananas” from EC overseas territories and former colonies.
Germany’s Banana Love
EU policies and Chiquita (1994-present)
1994
•The company accused the European Union quota policy as unfair.
1995
•Running in losses, Chiquita sold John Morrel, the meatpacker subsidiary.
1996
•EU policy challenged by Guatemala, Mexico, and Honduras in WTO
1997
•WTO ruled EU’s trade policy as illegal.
1999
•WTO finds EU unlawful and sides with US. EU refuses to change quota system.
2000
•US imposes economic sanctions on EU as a part of banana war.
•Ecuador imposed sanctions on EU
2001
•EU and US settled their differences. New tariff to be implemented from 2006
2002
•Chiquita started restructuring its debt, protected by the US bankruptcy legislation.
2003
•Chiquita acquired Atlanta AG Group, a leading banana company and decides to focus on its fresh fruit market
2004
•Company sells Colombian division to Banacol for $52 million.
2005
•Chiquita acquired Performance Food Group's Fresh Express division.
2006
•EU agreed to reduce the import tariff to 176 euros per tone on bananas imported from countries enjoying MFN status.
2008•After the EPA, between EU and ACP countries, ACP producers obtain an important tariff preference without limitation of quantities. Customs duty for MFN is still 175 euros/ton.
Now•Chiquita in a diverse range of fresh and value added food products. Bananas still constitute a major portion of the revenues.
2008
•After the EPA, between EU and ACP countries, ACP producers obtain an important tariff preference without limitation of quantities. Customs duty for MFN is still 175 euros/ton.
Now
•Chiquita in a diverse range of fresh and value added food products. Bananas still constitute a major portion of the revenues.
“no one laughs at the banana in its areas of origin. It is too serious a business, on which jobs and lives depend.”
(Jungle Capitalists, Canongate Books, 2007)
Bananas are serious business
Thank You
Thank You
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK
Map of banana Trade flows (2002)
Dominican Republic
Colombia
Peru
Ecuador
Mexico
Honduras
Guatemala
Canarian Island
BACK