Premium Essay

Banana Cartel Case in Europe

In: Business and Management

Submitted By useng2salma
Words 796
Pages 4
1) Antitrust: Commission fines banana suppliers € 60.3 million for running price cartel, EC IP/08/1509, October 2008,
2) COMMISSION DECISION of 15 X 2008 relating to a proceeding under Article 81 of the EC Treaty Case COMP/39188 – Bananas, COMMISSION OF THE EUROPEAN COMMUNITIES, Brussels, 15 X 2008,
In 2008, the European Commission, found that the banana importers Dole, Chiquita, Weichert and Del Monte involved in a cartel between 2000 and 2002. The allegation was on the basis of secret bilateral pre-pricing communications. The cartel affected the North European region specifically Austria, Belgium, Denmark, Finland, Germany, Luxembourg, Netherlands and Sweden with banana consumption estimated to 1.6 million tones and a shared retail value of sales amounted to €2.5 billion in 2002.
How was the collusion achieved?
The banana business is organised in weekly cycles. During the relevant period the importers of leading brands of bananas into the eight European countries served by North European ports set and then announced every Thursday morning their reference price (their “quotation price”) for the following week. On numerous occasions over the three year period there were bilateral phone calls among the companies, usually the day before they set their price. During these calls the companies discussed or disclosed their pricing intentions: how they saw the price evolving or whether they intended to maintain, increase or decrease the quotation price. These meetings did not take place every week but it was shown that there was consistent communication among the parties.
It was obvious that there were signs of explicit collusion happening among the three companies. As noted from the Competition Authorities, "Dole's quotation price…...

Similar Documents

Premium Essay

Blood Banana

...TB0245 Andreas Schotter Mary Teagarden Blood Bananas: Chiquita in Colombia No one laughs at the banana in its areas of origin. It is too serious a business, on which jobs and lives depend. Peter Chapman, Author of Jungle Capitalists. For Chiquita Brands International, a pioneer in the globalization of the banana industry, bananas are not only serious business, they represent an array of economic, social, environmental, political, and legal hassles. Since its founding more than a hundred years ago as United Fruit Company, Chiquita has been involved in paying bribes to Latin American government officials in exchange for preferential treatment, encouraging or supporting U.S. coups against smaller nations, putting in place dictatorships in Central America’s “banana republics,” exploiting local workers, creating an abusive monopoly, and now doing business with terrorists.1 For American multinationals, the rewards of doing business abroad are enormous, but so are the risks. Over the past decades, no place has been more hazardous than Colombia, a country that is just emerging from a deadly civil war and the effects of wide-ranging narco-terrorism. Chiquita found out the hard way. It made tens of millions in profit growing bananas in Colombia, only to emerge with its reputation splattered in blood.2 In 2004, Chiquita voluntarily admitted criminal responsibility to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection payments from......

Words: 9954 - Pages: 40

Free Essay

Blood Bananas

...Blood Bananas: Chiquita in Columbia Blood Bananas: Chiquita In Columbia is a difficult case that touches on fundamental questions of ethics and morality while operating a business abroad. It is a case that depicts the challenges faced by a company trying to maintain production and protect its employees while navigating between two very different cultures in a hostile situation. the lines of the ethics and morality are not as straight forward as they seem on the surface, and Chiquita’s management struggles to make decisions that will transcend both cultures’ view of right versus wrong. was one of the largest and growing   fruit company in America who faced a dramatic problem in the 90’s with the AUC, a Colombian paramilitary organization that promoted violence act and considered to be terrorist, what happened was they inquired the fruit company to pay them specific amount of money monthly that was required for their security services as they   claimed! The situation was straightforward, either Chiquita pays for the terrorist Chiquita Brands International and its leaders learned a very hard lesson about paying off terrorist groups to protect their employees. Over the past 25 years, no place has been more perilous for companies than Colombia, a country that is finally beginning to emerge from the effects of civil war and narco-terrorism. In 2004, Chiquita voluntarily revealed to the U.S. Justice Department that one of its Colombian banana subsidiaries had made protection......

Words: 824 - Pages: 4

Premium Essay

Cartels in Oil

...internal borders in Europe have faded or vanished. This enabled the development of a trade center in Europe. Consequently, the members of the EU are intensifying their business and compared with the pre-EU era, competitive behavior has reached its highest level. Unfortunately, some corporations turn to illegal activities in order to gain an advantage over other competitors. The results of these activities differ widely but their effects are always inhibiting for the competitive market. To counteract against these illegal activities, the European Commission (hereinafter the EC) investigates the European market thoroughly in order to maintain a competitive market across the EU. In recent years, the EC has intensified its anti-collusion behavior by charging fines of substantial amounts to companies who deliberately violated the rules and policies given by the EC. For example, in 1998, the European Commission fined ten companies with a total amount of ECU 92.21 million1 in the district heating industry and sentenced them for running a secret market-sharing, price-fixing and bid-rigging cartel for the pipes that were used in their constructions (European Commission, 1998). The action of the EC raises some interesting questions, as to whether the EC is justified to sentence companies for trading in the colluding way they did and whether the EC should be able to influence the trade in Europe by charging fines. This paper describes the effect on welfare that is caused by cartels and......

Words: 752 - Pages: 4

Premium Essay

Case Report: Blood Bananas: Chiquita in Colombia

...Summer 2013 Case Report: Blood Bananas: Chiquita in Colombia BUSA 4980 Chiquita Brands international was founded in 1899 after the merger of United Fruit Company and the Boston Fruit Company. As bananas be came more of a staple in every home so do Chiquita Bananas. Bananas are know to mainly grown in tropical places like Central America, Africa and Southeast Asia. Chiquita decided to have operations out of Colombia. During this time there was turmoil in Colombia and different terror groups form “against the government” & other wealthy people in the country. Some of these groups settled in the areas where Chiquita had facilities. Chiquita run into problems with theses groups around 1997, mainly with FARC (Revolution Armed Forced of Columbia) and AUC. They began to kidnap and kill employees of this company. The terrorist groups began asking for money in turn they would stop harming their employees. For Chiquita this decision to pay the AUC seem to be an easy one because or the lack for government and the lack of laws in place. There are many key issues that lead Chiquita Banana’s decision to pay the terrorist groups the FARC & the AUC. One key issues the increasing demand for bananas in new countries like Russia, China and other countries in the Middle East. Chiquita felt as if it had pressure to obtain and grow in these markets. Along with those new markets, Chiquita had their current demand in established markets like the United States and Europe. On......

Words: 818 - Pages: 4

Free Essay


...explain why cartels may not succeed in any economy including Kenya. A cartel is a formal (explicit) agreement among competing firms. It’s a formal organization of producers and manufacturers that agree to fix prices, marketing and production. Cartels usually occur in an oligopolistic industry, where there are a small number of sellers and usually involve homogenous products. Cartels members maybe agree on such matters as prices fixing, total industry output, market shares, allocation of customers, allocation of territories and the division of profits. There are either private or public cartels. One can distinguish private cartels from public cartels. In the public cartel a government is involved to enforce the cartel agreement, and the government's sovereignty shields such cartels from legal actions. private cartels are subject to legal liability under the antitrust laws now found in nearly every nation of the world. Many price fixing or market sharing agreements eventually either collapse or whither on the vine - here are some reasons: 1. Falling demand creates excess capacity in the industry e.g. during an economic downturn / recession - the classic example here is the deep tension within the OPEC oil cartel caused by the world economic recession which is causing a steep fall in the global demand for crude oil. Will OPEC deliver on planned output cuts in order to stabilize the price of crude at or around $50 a barrel? 2. Disruption caused by the entry of non-cartel......

Words: 319 - Pages: 2

Premium Essay

Chiquita Banana

...[Name] | International Marketing Cases | October 20, 2013 [Name] | International Marketing Cases | October 20, 2013 Chiquita Banana Chiquita Banana Contents Chiquita Banana Overview 2 PESTEL analysis for the European Union 2 Political: 2 Economic: 3 Sociocultural Factors: 3 Technological: 4 Legal: 4 Environmental: 5 Marketing Mix 6 Product: 6 Price: 6 Place: 7 Promotion: 7 SWOT Analysis 8 Strengths: 8 Weaknesses: 8 Opportunities: 9 Threats: 9 Internationalization Strategy and Viability 10 Chance: 11 Incoterm 12 Possible incoterms for the company 12 Solution 12 Appendix A 14 Works Cited 15 Chiquita Banana Overview Chiquita Brands International, Inc. is one of the most important international marketers and distributors of food products derived from bananas, as well as other fruits and healthy snack products. Chiquita Banana revenues for about $3 billion dollars a year and employs more than 21,000 people and operates in about 70 countries worldwide. Chiquita Banana together with Dole, Del Monte and Fyffes control about 80% of the global banana market. In 1993 the EU created the Common Organization of the Market in Bananas (COMB) to deal with the harsh competition between these companies. They would allow duty free access to the EU but subject to quotas to bananas from the Africa’s, Caribbean and Pacific, while bananas from Latin America were subject to an import tax of 176 Euros per ton and a quota of 2533...

Words: 3742 - Pages: 15

Premium Essay

The "Bathroom Manufacturers" Cartel Case

...The “bathroom manufacturers” cartel case Maastricht University | | | | School of Business & Economics | | | | Place & date: | Maastricht, 28.11.2014 | Name, initials: | Romet Puiga, RP | ID number: | I6094472 | Study: | Economics & Business Economics | Course code: | EBC1010 | Group number: | 2 | Tutor name: | Kutay Cingiz | Writing tutor name: | Jim Schumacher | Writing assignment: | Main Paper (Task 10) | | | Table of Contents 1. Topic introduction 2. About cartelization 3. Overview of EU antitrust legislation 4. Analysis of the “bathroom manufacturers” cartel case 5. Conclusion References 1. Introduction According to the European Commission Press Release Database, 2010, Article IP/10/790, seventeen bathroom equipment manufacturers were fined a total amount of €622 million for engaging in cartelization the same year. This case certainly provides an interesting topic for research and analysis as the cartel included seventeen manufacturers in six European countries and had a lifespan of twelve years. These quick facts demonstrate just how serious, extensive and carefully covered the agreement was. Not only did this market manipulation have a significant effect on the economy of these six countries, but also on the economic situation of the European Union as a whole and therefore touched the global economy. As the case is so extensive, it is important to...

Words: 2433 - Pages: 10

Premium Essay

Bananas Case

...Describe shortly the most important strategic choices and activities based on which Bananas competes in the field marketing industry Bananas focuses on becoming a highly efficient field marketing company, using softwares like proprietary software platform to increase both the quality and reliability of execution. It also cuts costs (variable costs are lower by 15-20%) and increases profit margin (clients were willing to pay about 5-10% more for Bananas’ services). Finally, Bananas provides perfectly executed solutions to clients, “no nonsense approach”. Threat to Profits from Entry Entry in general requires little capital and know-how. However, relationships play an important part in both getting contracts and signing better deals on purchased materials and services (with savings upto 20%). Moreover, the market is more or less saturated with lots of small local companies. To sum up, it seems like the entry barrier is high and therefore it works for the profitability of the market Threats to profits from supplier power Little information is given on supplier. According to the little information given, we learn that most suppliers charge more or less the same price (e.g. all companies pay promo people approximately the same) and that large agencies can bargain down significantly. Threats to profits from supplier power seem low. Threats to profits from Substitutes Substitutes of field marketing include traditional advertising and internet advertising. Neither form of......

Words: 461 - Pages: 2

Free Essay


...In February 2009 was the day reality caught up with nine firms who have run a hard core cartel in pre-cast concrete products since 1973. On this day the Commission referred yet another cartel case to the Competition Tribunal for adjudication, citing Rocla, Aveng as a holding company (hereafter referred to as Infraset), Southern Pipeline Contractors (SPC), Cobro, Concrete Units, Cape Concrete, Concrite Walls, Grallio, Craig Concrete, and D&D Concrete (hereafter referred to as “the Rocla matter”). On the same day as the Commission referred these charges to the Competition Tribunal, the Commission settled certain particulars of the complaint with Aveng, including an administrative penalty of R46 million. Rocla, a subsidiary of Murray & Roberts, was granted conditional leniency by the Commission after coming forward in December 2007. Rocla complied with the Commission’s Corporate Leniency Policy (CLP) in providing information which implicated itself and its competitors in price fixing and fixing of trading conditions, market allocation and collusive tendering in the market for pre-cast concrete products such as pipes, manholes and culverts. This information revealed a textbook example of a classic cartel, complete with well written modus operandi, sanctions for non-compliance, payments to keep competition out of the market, intent and ability to raise prices and effective monitoring mechanisms. It all began in 1973 when enforcement of competition laws was not as rigorous as it......

Words: 517 - Pages: 3

Premium Essay

Case Study (Wipro Technologies Europe a)

...Case study 1. The Background of the Case Wipro technologies are a company focused on the software and information technology service division as a part of the Wipro group whose header quarter located in Bangalore, India (Wipro Technologies Europe A, 2015). Nandy as the director of Sales and Marketing in Europe started the European operation in London as the headerquarter for Western Eurpoe and he was an Indian with the Indian and American working experiences (Wipro Technologies Europe A, 2015). As a global company, Wipro’s European sales, marketing and project management staff were exclusively Indian expatriates with a short time in Europe (Wipro Technologies Europe A, 2015). These staffs couldn’t build good relationships with the local communities compared with its competitors (Wipro Technologies Europe A, 2015). So Nandy took some measures to deal with these issues such as the Unreasonable staff structure and inadequate relation network. 2. The Analysis of some measures adopt by Nandy from three perspective of three culture framework This part will analyze the measures applied by Nandy from three perspectives of Hofstede cultural dimensions and Hall cultural dimensions in order to evaluate whether these measures are effective. 3.1 Hofstede Cultural Dimensions Hofstede cultural dimensions mainly consist of five aspects containing Power distance, Uncertainty avoidance, Femininity vs. masculinity, Individualism vs. collectivism and Confucianism vs.......

Words: 1355 - Pages: 6

Premium Essay

Banana Uk

...britain ’s bruisin g banana wars Why ch threat eap bananas Policy en farmers’ report future s A Fairtrade Foundation Report February 2014 When I sell a box of bananas it’s a product with quality, with incredible taste, so it should be fair that you pay a fair price for it. Horatio Hernandez Coobafrio Co-operative, Magdalena, Colombia January 2014 contents 1 Introduction 4 2 6 Executive Summary Britain’s Bruising Banana Wars 16 16 20 21 4 The banana value chain 4.1 The UK banana market 4.2  The retail price of bananas in Britain 4.3 UK banana imports 2002 – 2013 4.4  Changes in banana supply chain operations 4.5  The impact of supermarket price wars on producers 4.6  Producer prices vs costs of sustainable production 22 22 23 5  The market environment for bananas 5.1  Evolution of the global banana trade 5.2  Consolidation of retailer power and UK price wars 5.3  The impact of competition law on banana prices 38 6 Fairtrade’s alternative approach 6.1  General background to the Fairtrade system 6.2  Fairtrade bananas – scope and scale 6.3  airtrade: the benefits and F constraints for farmers and workers 2 3 About this report 3.1 Fairtrade’s involvement in bananas 3.2 Research objectives and approach 3.3 Methodological note 7  Achieving a sustainable banana industry 7.1  inclusive market......

Words: 31335 - Pages: 126

Free Essay

Drug Cartel

...Mexico. The drug cartels have taken over the city and have continued to control the city. The city officials have been defeated over and over again; hopeless they still search for new ways to win this ongoing war. Using technology in the United States has become a crucial part of it's survival, since our failure to use intelligence properly in the attack of nine-eleven. Mexico is now attempting to use use the same method in hope that they can be steps ahead of the cartel to ensure success. The Drug Cartels are very violent organizations in Mexico. Between December 2006 and December 2010, there were more than 30,000 deaths in the country. The Cartels in Mexico have become very powerful since the Colombian cocaine traffickers were prevented from transporting their drugs through the Caribbean into the United States. In the 1970 the Colombian cartels transported the cocaine shipment either by plane or by sea. The United States with the use of radar could easily track them and confiscate their shipment. In the drug cartel technology usage will be used in the measure intelligence it is “investigating illegal drug trafficking” . (Buckley, John (2013-10-30) In the late 1980’s the cartel had to ship large shipments. The Columbian Cartel would do their shipment through the Caribbean . In this book it states that it “was easy guarded with the use of radar and since all drugs shipments were made by air or sea“. (Meisenhalter 129) The Colombian cartel was forced......

Words: 2637 - Pages: 11

Free Essay


... J. 1987. Banana. p. 29–46. In: Fruits of warm climates. Julia F. Morton, Miami, FL. Banana Musa x paridasiaca Description Origin and Distribution Varieties Climate Soil Propagation Culture Harvesting Yield Handling and Packing Controlled Ripening and Storage Pests Diseases Food Uses Animal Feed Other Uses Folklore The word "banana" is a general term embracing a number of species or hybrids in the genus Musa of the family Musaceae. Some species such as M. Basjoo Sieb. & Zucc. of Japan and M. ornata Roxb., native from Pakistan to Burma, are grown only as ornamental plants or for fiber. M. textilis Nee of the Philippines is grown only for its fiber, prized for strong ropes and also for tissue-thin tea bags. The so-called Abyssinian banana, Ensete ventricosum Cheesman, formerly E. edule Horan, Musa ensete Gmel., is cultivated in Ethiopia for fiber and for the staple foods derived from the young shoot, the base of the stem, and the corm. Most edible-fruited bananas, usually seedless, belong to the species M. acuminata Colla (M. cavendishii Lamb. ex Paxt., M. chinensis Sweet, M. nana Auth. NOT Lour., M. zebrina Van Houtee ex Planch.), or to the hybrid M. X paradisiaca L. (M. X sapientum L.; M. acumianta X M. balbisiana Colla). M. balbisiana Colla of southern Asia and the East Indies, bears a seedy fruit but the plant is valued for its disease-resistance and therefore plays an important role as a ";parent"; in the breeding of edible bananas. M.......

Words: 15803 - Pages: 64

Premium Essay

Blood Bananas: Chiquita in Columbia Case Latin America has continued in similar veins. In 1928, several thousand workers of Colombia's banana plantations began a strike demanding written contracts, eight-hour days, six-day weeks and the elimination of food coupons. Military forces murdered thousands of United Fruit Company Workers who were protesting. [1] Throughout the 20th century, the company was infamous for using a combination of its financial clout, congressional influence and violent refusal to negotiate with striking workers to establish and maintain a colony of "banana republics" in Latin America. Often the CIA and the US Marines provided the company's muscle, as in the case of the overthrow of the populist Guatemalan president Jacobo Arbenz in 1953. [2] In 1975, a federal grand jury accused United Brands of bribing Honduran President Osvaldo Lopez Arellano with $1.25 million, with the promise of another $1.25 million later, in exchange for reducing taxes on banana exports. Lopez Arellano was removed from power, but later investigations revealed repeated bribes carried out by the company. [3] Subpoenas were also issued regarding possible payoffs in Italy, West Germany, Panama and Costa Rica. [4] In May of 1998, The Cincinnati Enquirer published a series of articles that exposed Chiquita's still-questionable business practices. The articles, written by Mike Gallagher and Cameron McWhirter, reported cases in which the company used tactics including "bribery, abusive corporate control in Honduras......

Words: 3708 - Pages: 15

Free Essay


...neutralize weak and strong acidic solutions using mixture of ashes of banana leaves, banana peelings and potato peelings. 2. Specific Objectives: a. What is the pH of the weak and strong acidic solutions after incorporating mixture of ashes of banana leaves, banana peelings and potato peelings? b. Which of the following mixture of different amounts of ashes of banana leaves, banana peelings and potato peelings will best neutralize the pH of the acidic solutions? c. How long will the neutralization take effect on the pH of the acidic solutions once the mixture of ashes of banana leaves, banana peelings and potato peelings is incorporated to the solutions? B) Hypothesis/Objectives: 1. The neutralization of pH of acidic solutions using mixture of different amounts of ashes of banana leaves, banana peelings and potato peelings will significantly differ. 2. The neutralization of pH of acidic solutions using mixture of different amounts of ashes of banana leaves, banana peelings and potato peelings will not significantly differ. C) Methods/ Procedure (Describe in Detail): 1. Materials/ Equipments: The following materials and equipments will be used in the experimentation of the study: 12000ml (12L) of pure drinking water, 45 pieces of ripe bananas, 45 pieces of potatoes, 60 pieces of banana leaves, lemon, watermelon, disposable plastic......

Words: 1502 - Pages: 7