Chiquita Brands International A Case Solution

1. What role has politics played in the history of Chiquita Brands, and its predecessor, the United Fruit Company? 

Political aspects play a crucial role in determining the position of a business. If the governmental standings are in the favour of the business, it has more chances of success than if the political standings are against it. The European Union's restrictions, according to Chiquita Brands International's President and Chief Operating Officer, Keith E. Lindner, were the chief factor in the loss of the Chiquita Brand. The stock of Chiquita, which was trading at $40 in 1991, fell to $13.63 by the end of 1994. Partner states had enacted several import restrictions as the European Union (EU) drew closer to completing its single market, posing a challenge to Chiquita's monopoly on the $3 billion EU banana market. As the market share of Chiquita was corrupted, other unsettling costs swept in, which called for immediate action by the senior management.

In 1994, Chiquita and Dole which were U.S. based served as the major producers of the global banana industry. Latin America, accounted for approximately 75% of worldwide deliveries by capacity. A fresh banana import scheme that allowed the entire community of bananas imported from Latin America, where Chiquita is believed to be the largest producer, was approved by the EC on July 1, 1993. Companies like Chiquita would not be able to pay the tariffs associated with imports of bananas from Latin America that exceeded the two million metric ton threshold under the conditions of the new deal. To manage the quota, the EC developed a complicated licensing system, allowing Chiquita's rivals who had facilities in the EU to import an ample portion of the two million metric tons allowed by the plan. All of the other EC nations, excluding Germany, continue to place various limitations on imported bananas.

Several nations, including Greece, Belgium, Netherlands, Luxembourg, Ireland, and Denmark, implemented relatively simple protective measures with a 20% a.v. scope. import taxes on bananas coming from countries that weren’t desired. Some countries, including the UK, France, Portugal, Italy, and Spain, combined tariffs with several less evident non-tariff restrictions, such as quantitative quotas, import license requirements, and import bans.