Fixed Prices
EU fines Dole, Fresh Del Monte in banana cartel case
European Union regulators fined Dole Food Co. and Fresh Del Monte Produce Inc. 60.3 million euros ($82 million) over claims the banana importers fixed prices in eight countries between 2000 and 2002.
Dole was fined 45.6 million euros and Fresh Del Monte is jointly responsible for a 14.7 million euro fine along with its former unit, Internationale Fruchtimport Gesellschaft Weichert & Co., the European Commission said in a statement from Brussels. Chiquita Brands International Inc. avoided an 83.2 million-euro penalty because it told regulators about the price-fixing cartel.
“It is totally unacceptable for companies to have rigged prices in this manner and the companies concerned must learn the hard way that the commission will not tolerate such behavior,” European Competition Commissioner Neelie Kroes said in the statement.
The commission's decision follows a three-year probe into banana imports. The market for bananas in the eight countries, including Austria, Denmark and Germany, amounted to about 2.5 billion euros in 2002.
Dole, based in Westlake Village, California, said in a statement that it doesn't believe that it violated competition law and will appeal the fines.
Hans-Peter Weichert, managing director of Weichert, declined to immediately comment. The company, which was purchased by Dublin-based Fyffes Plc in 2002 for $30 million, may issue a statement later today, he said.
Reduced Fines
The commission didn't specify how Fresh Del Monte and Weichert would apportion the fine. Fyffes, which was also investigated by the EU, wasn't fined in the case. Brian Bell, a spokesman for the company, said it would issue a statement.
The commission said it cut the fines against Dole and Hamburg-based Weichert by 60 percent because under rules in force at the time of the investigation, the EU favored imports of bananas from former European colonies over Latin American producers through a system of import tariffs and quotas. Commission spokesman Jonathan Todd told journalists at a briefing that the commission reduced the fines because the import quotas “had an effect on the functioning of the market.”
“Even though there were quotas and the quantities imported were set, they weren't quoted for each individual company, and companies could and should have been competing against each other rather than getting together and fixing prices,” Todd said.
The commission reduced the penalty against Weichert by an additional 10 percent because it didn't participate in a part of the cartel. Del Monte is jointly liable for paying Weichert's fine because it controlled the company at the time of the infringement, the EU regulator said.
The EU probe began in June 2005, when inspectors raided the offices of fruit suppliers. Chiquita, the largest banana seller in Europe, said in a June 2005 statement that some of its employees shared pricing and volume information over many years with competitors and may have violated EU competition law.
(Published by Bloomberg- October 15, 2008)