Post on 06-Apr-2018
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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.