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CHIQUITA BRANDS

INTERNATIONALGROUP 4

ABHISHEK SRIVASTAV (064)ANUSH SAHA (074)

HIMANSHI TANDON (084)NIGNA SANKHASULA (094)RICHA MARWAHA (104)SUMANT MIKHAIL (114)


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The why & howof theBanana Republic

(put d map here)

Phase 1


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Republicwhats in the name?


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How did it all start? 1870: Lorenzo Baker, Captain of Telegraph stumbles

upon a lucrative banana trade!! 1885: Baker & his partners (Andrew Preston) set up

Boston Fruit Company

1899: BFC merges with Keiths banana trading concernto form United Fruit Company 1970: UFC merged with Blacks AMK to become United

Brands Company 1984: Carl Lindner Jr. transformed UB into the present-

day Chiquita Brands International.

And this company almost single-handedly degraded Latin America

to what we know today as the Banana Republic.


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Intricacies of the Banana Industry Commercial banana production needs mammoth investments:

Large farms with extra spare acreage Capital to clear the dense & deadly tropical forest

Capital for drainage and irrigation Risk of tropical storms and hurricanes Capital for worker ( yellow fever & malaria rampant) Banana uniquely vulnerable to weather & disease (highly perishable) Capital for repair of flood damaged fields Capital needed for pesticides & other disease controls Capital to buy land to house workers, build warehouse & power plants Capital for transportation; roads, trams, rail (to move harvest from

plantation to port) & refrigerated ships (to ship harvest to market) Capital for communication; telegraph & telephone to match supply to

demand


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Capital intensive need for large scale production,transportation, communication, distribution to supplyrapidly growing consumer market with banana on a

timely basis

Vertical integration to combine both production anddistribution in one firm , in an effort to

1. Protect huge investments from

upstream/downstream threat2. Achieve economies of scale

3. Ensure consistent delivery and quality of product

Hence Banana industry got concentrated with 6 largedominant global firms

1. Chiquita (USA)

2. Del Monte (USA)

3. Geest PLC (England)

4. Fyffes PLC ( EC)


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The why & how of the degradation process

Latin America was the closest and largestsource of bulk banana production

Banana itself second in value to coffee intraded foodstuff category

Transportation costs high and perishabilitycrucial


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Birth Of La-Pulpa

Worked closely with the government of its producing regions Bribed government officialsDevelopedextensive political

connections

Preferential treatment-. Minor keit, vice president of UFCcame to be known as the Green Pope

Abused labour laws-exploited its workers

Paid little by way of taxes to the governments of the countries

Controlled transportation system that gave them more power.

Leveraged theconnection

Govt. Protection-In 1911 and 1912, American government sentthe marines Honduras to protect the investments of UFCduring a civil war in Honduras

UFC and Samuel Zemurray were implicated in a conspiracy tooverthrow the Honduran government.

Other Benefits


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Black Days

A covert operation organized by UFC to overthrowJacobo rbenz Guzmn, the democratically-electedPresident of Guatemala.

New policies-rbenz instigated sweeping land reformacts that antagonized UFC

CIA director Allen Dulles feared that Guatemalawould become a Soviet beachhead

Operation PBSUCCESS- CIA armed and trained an ad-hoc "Liberation Army" of about 400 fighters underexiled Guatemalan army officer, Colonel Carlos

Castillo Armas Established the Voice of Liberation radio station

Lasted from late 1953 to 1954

Ended the representative democracy

Following the coup, the Guatemalan Civil War began

Guatemalan

coup d'tat

1954


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Black Days

On 12th November 1928, UFC workers in Colombiawent on a strike

On 6th December 1928, Colombian Army troopsopened fire on a crowd of 30,000 striking UFCworkers

Congressman Jorge Elicer Gaitn claimed that thearmy had acted under instructions from the UFC

TheBanana

Massacre

On May 3, 1998, The Cincinnati Enquirerpublished aneighteen-page section

accused the company of mistreating the workers anda host of other misdeeds

ChiquitaSecretsRevealed


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Black Days

"ChiquitaSecrets

Revealed

2004-Inorder to combat labor opposition

and social disturbances, Chiquita funded,armed, and supported the AUC and otherterrorist groups

TerroristSupport

Chiquita denied all the allegations, and sued

On June 28, 1998, the Enquirerretractedthe entire series of stories, published afront-page apology, and paid cash in excessof $10 million


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Revelation and Justification

In 2007 Chiquita Brands was fined $25 million aspart of a settlement with the United States Justice

Department for having ties to Colombianparamilitary groups. According to courtdocuments, between 1997 and 2004, officers of aChiquita subsidiary paid approximately $1.7

million to the right-wing United Self-DefenseForces of Colombia (AUC), in exchange for local,employee protection in Colombia's volatilebanana harvesting zone.

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