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EU examines price fixing among fruit distributors

06-Jun-2005

In response to regulatory raids last week on fruit suppliers across Europe, Chiquita has blamed some of its employees for sharing pricing and volume information with its competitors on the continent and in North America.

In a statement Chiquita said the transfer of the information and other conduct by the unnamed employees may have violated the EU's competition laws and the company's policies.

The company said it was cooperating with the European Commission's investigation into price fixing by the food giant. The investigation may expose Chiquita and its rivals to fines if the Commission discovers the information may have resulted in higher prices for consumers.

On 3 June European anti-trust official raided the offices of Chiquita, Fyffes , Dole, Del Monte and other rivals in Germany, Belgium, the UK andIreland.

The European Commission has granted Chiquita immunity from any fines related to the investigation since the company had first notified the bloc's administrative body about the problem. The companyoriginally made a statement on the matter in its quarterly report, released on 10 May.

The European Commission said on 3 June it is examining practices by the major producers and distributors of bananas and pineapples for possible violations of European competition law.

"As a result of the company's internal compliance programme, the company's management recently became aware that certain of its employees had shared pricing and volume information over many years with competitors in Europe, and may have engaged in other conduct, in violationof European competition laws and company policies," Chiquita said in a statement. "The company promptly stopped the conduct and, after consultation with the board of directors, notified the European Commission ofthese matters."

Employees in an unnamed Latin American country shared information with competitors regarding the volume of fruit shipped from that country to North America, the company said. Chiquita does not believe the occurance had any anticompetitive effects. The company has stopped the information sharing and has notified regulatory authorities in theUS and Canada, a press release stated.

Under the EU's antitrust rules, the European Commission can impose fines on companies representing up to 10 per cent of their annual sales . In 2001 the European Commission fined seven foodcompanies a total of €855.2 million euros for fixing the price of vitamins.


In May Chiquita Brands International reported first quarter 2005 net income of $87 million, compared to net income of $20 million in the same period last year. The company said it had achieved its best quarterly results in more than adecade due to the expansion of its banana business and strong pricing in Europe and North America. The company's sales of bananas rose 24 per cent in the first quarter to $520 million worldwide.

Chiquita is one of the largest banana producers in the world and a major supplier of bananas and other fruit in Europe and North America.

World trade in bananas is dominated by Dole, Chiquita, Del Monte, Noboa and Fyffes.

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