Government surprised by banana company merger

By Admin Wednesday March 19 2014 in Caribbean
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CASTRIES:St. Lucia Prime Minister Dr. Kenny Anthony says his administration was surprised at the move by Chiquita Brand International to acquire the Irish-based Fyffes, which distributes fruits, including bananas, across Europe.


Last week, Chiquita announced that it would pay approximately $526 million for Fyffes. Global industry sources said the deal will potentially give Chiquita some sway over prices.


However, Dr. Anthony said that while regional banana producers would not forget the role played by the U.S.-based company in the erosion of the preferential treatment for Caribbean bananas on the European market, the new deal opens new possibilities forCaribbeanbananas.


He said the Windward Islands Banana Development and Exporting Company (WIBDECO) whose mandate is to strengthen the competitiveness of theWindward Islands’ banana industry, would now have to ensure that the islands take advantage of the agreement involving Fyttes that markets the region’s fruit.


“There is no doubt with the challenges that we are facing with bananas WIBDECO would have to recalibrate and virtually reshape its operations in the region and in some extent is struggling to do so. Whether or not it has been successful is a different matter but an effort is being made.


“I don’t think necessarily that would compound the pressure but I would say on the other hand WIBDECO would have to lead the way in help in us to maximize any benefits from this relationship between Fyffes and Chiquita,” said Anthony.


The Prime Minister said the demands for bananas from the Windward Islands – Dominica, St. Lucia, St. Vincent & the Grenadines and Grenada – remain within the European market.


“There is demand for our fruit,” he said. “The problem is production. We are not producing enough for the UK market. I think this merger between Fyffes and Chiquita does in fact present market opportunities and we have to explore these market opportunities. Incidentally, let me also say I think there is also huge possibility for marketing our bananas in the region itself.”


Anthony said he had been told that the price the regional banana producing countries receive for selling their fruit in the Caribbean “is much higher than the price we get for selling our bananas to the UK”.


According to the US Department of Agriculture, bananas account for more than a quarter of all the fruit eaten in the United States, with the country importing 3.8 million to 4.1 million tons of bananas a year.


The new company, to be named ChiquitaFyffes, will have about US$4.6 billion in annual revenue, shipping about 160 million boxes of bananas a year. Although Chiquita shareholders will own about 51 per cent of the new company, ChiquitaFyffes will be based in Ireland.


Chiquita has annual revenue of more than US$3 billion and employs 20,000 people in nearly 70 countries while Fyffes employs 12,000 people and has annual revenue of more than US$1.5 billion.

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