This website uses cookies to ensure you have the best experience. Learn more

Chiquiti Essay

1346 words - 6 pages

October 24, 2002
G302 Breakout Session

9: International: Chiquita Banana Case

Goal of this session: To appreciate the importance of government trade policy to a company’s profits, and thus the importance to the company of trying to figure out why protectionism happens and how to counteract it.

Handouts for students: none.

Handouts for TA's: Nov. 29, 2001, Seattle Times article "Chiquita Files for Chapter 11".

Overheads: Exhibit 1, income statement.

Chiquita Brands Case Write-up Questions:

1. What is the European Union's past and present policy on banana imports? How would you defend their 1993 policy?

2. What problems does Chiquita have in this case? Look ...view middle of the document...

(Ex 7) (not 6, as in teaching notes)

EU Trade policy.

After you have this list up, or enough of it, ask

Q. Exactly how does the EU trade policy work?

This is a big question, so more than one student will be needed to handle it. You can stop somebody halfway through, and have someone else continue, or start with one person, and then ask for corrections or elaboration.

A. There are 4 categories (p. 9 of the text):

1. EU bananas (limited to traditional levels, no tariff)
2. Traditional ACP bananas (Africa, Caribbean, Pacific) (limited to traditional levels, no tariff)
3. Non-traditional ACP bananas (in excess of traditional production levels) (part of the 2 million ton quota, but no tariff)
4. Third country bananas (part of the 2 million ton quota, with a tariff off 100 ecus, 30% of the old price)

If anyone wants to import bananas beyond the quota, they pay a huge tariff of 750 or 850 ecus, so nobody will want to do that.

The allocation of the 2 million ton quota is by licenses. Effectively, US companies get 1.3 million tons, EU companies .7 million, and new entrants almost nothing.

Then, in March 1994, (p. 10 of the case), Costa Rica, Columbia, Nicaragua, and Venezuela signed the “Framework” agreement to raise the quota to 2.1 million, but to give those 4 countries about half the quota—more than their share before the quotas were imposed in the first place.

(The provisions on p. 22 are complicated, and not important for us for the case, but what they are doing is splitting up license priorities among operators that grow their own bananas, operators who do not, etc.)

Q. How will this affect Chiquita?

A. In 1991, 2.4 million tons were exported from Latin America to Europe, of which 960,000, 40%, came from Chiquita. If Chiquita only sells 40% of the 1.3 million ton quota in the future, that is just 520,000 tons. The rest have to be dumped in the rest of the world. And the other companies will be dumping their former EU bananas in the rest of the world too, depressing prices.

Moreover, Chiquita grew relatively few bananas in the “Framework” countries of Costa Rica, Columbia, Nicaragua, and Venezuela, so it would have to cut back on EU exports more than other US companies.

(10 mins) Causes of the Problems

Q. How much of Chiquita’s poor financial position is caused by the EU quota?

A. Not all of it. Chiquita has been declining since 1991, and the EU policy only came into effect in 1993. Chiquita had a loss of 284 million dollars in 1992, and the banana prices started falling then.

Q. So what else besides the EU quota has been hurting Chiquita?

A. Falling banana prices. As Ex. 7 shows, banana prices go up and down all the time.

The teaching note suggests that Lindner’s youth (age 35) and mismanagement might be part of the problem. I’m skeptical. The only...

Other Papers Like Chiquiti

Jail Responsibilities Essay

589 words - 3 pages Jail Responsibilities Monique Priorello September 23, 2012 One of the main responsibilities of a jail is to give the officers the correct “Police Correspondence” courses. This is because these courses give the officers the effective basic training that they need to do things such as; Writing of Memoranda, Police Reports, and Civilian Letters. What needs to be done first is make sure that there are NO errors. This means in

Mgt330 Essay

638 words - 3 pages Starbucks Nefertiti Wright Sangita Patel October 15, 2012 STARBUCKS 2 STARBUCKS - 1 - [no notes on this page]I. Job description a. Baristas II. Job specifications a. Duties III. Form of departmentalization STARBUCKS 3 Starbucks Starbucks have been named in the 100 best companies to work for. Starbucks has many job opportunities for people, which require the right job specifications. The employees create uplifting experience

Fight Club

917 words - 4 pages Fight Club is a story of the narrator’s struggle to gain control over his life. He is in search for an identity in the form of manhood. His masculinity is so repressed because of the absence of a father figure in his life. Because of this he creates Tyler, his alternate personality. Tyler is nothing like anyone the narrator has met, he is self assured and completely free. The narrators alternate personality Tyler Durden is the ultimate alpha-male

The Powers Of The Health And Safety Representative

254 words - 2 pages The Powers of the Health and Safety Representative A health and safety representative has the power to: Identify Workplace Hazards The health and safety representative has the power to identify workplace hazards. This power is usually exercised by conducting workplace inspections. Obtain Information from the Employer The health and safety representative is entitled to the same information available to a joint committee member. Under the Act

Lesson Plan

6476 words - 26 pages QWERTYUIOP by Vivien Alcock Table of Contents Introduction About Short Stories The Writer Synopsis Elements Activities Beyond The Text Assessment Answer Key Glossary Panel of Writers [pic] SHORT STORY Welcome to the World of Literature and to Short Stories! We hope you will enjoy working with this guidebook, which has been specially designed to help you prepare your students enjoy the Literature


1227 words - 5 pages Coca-Cola Global Business and Marketing Strategy Introduction As domestic markets mature, it is becoming more and more fashionable for organisations to seek growth through opportunities in foreign countries. Faster communication, new technologies and improved transport links are making international markets more accessible and businesses pursuing a global position can experience an upsurge in brand awareness and cost effectiveness. Global

Facing Poverty With A Rich Girl's Habit

783 words - 4 pages Facing poverty with a rich girl’s habit Adele Strader Professor Chryst English Composition October 22, 2012 Facing poverty with a rich girl’s habit was written by Suki Kim and published in the New York Times on November 21, 2004. The most important point that Suki want to make was that (1) what we have in life can be taken away in an instant (2) do not go bankrupt in South Korea (3) that a person must adapt and endure

3-4-50 Paper

572 words - 3 pages -4-50 paperLack of exercise is a key contributor to disease and death among many people in the United States, regardless of age. It is a well-known fact that exercise results in a healthier lifestyle. Along with tobacco use and poor nutrition, lack of exercise is one of the main issues that people have which leads to high blood pressure, obesity, and other serious health problems. According to a study by UCSD School of Medicine and SDSU


836 words - 4 pages Miguel Beatrice Capitalism is an economic system in which private individuals and business firms carry out production and exchange of goods and services through complex transactions involved in prices and markets. By extension called capitalist higher social class of this economic system ("bourgeoisie"), or to the common form would the individual interests of capital owners in both companies, shareholders and patterns, also called capitalism


1177 words - 5 pages Homelessness in America Homelessness in America is a social problem that we are faced with on a daily basis. Despite the vast number of research done by Americans on homelessness, little is still known about the effect that it has on our society. The overall image that emerges from the effects of homeless people

Mental Health Community Service Essay

509 words - 3 pages Ladesca Smith Nursing 162 Community Volunteer Service Assignment Why you chose this agency? I chose this Sharing God’s Love, because I was interested in what kind of services they provide. I also wanted to know if there was any help out there for the people in need with mental illnesses. I also had lots of my kid’s old clothing that I needed to get rid of, so I donated it to them. Describe the population the agency serves. The

Related Essays

Lafarge S.A Essay

2924 words - 12 pages NAME: IHEKANANDU KINGSLEY N. COURSE: MGMT 292 / F12 N01 TITLE: INDIVIDUAL CASE STUDY (LAFARGE S.A.) SUBMITTED: October 5, 2012 TABLE OF CONTENTS 2. INTRODUCTION 3 3. DESCRIPTION OF CASE 4 4. VALUES 4 4.1. Types of values 4 5. TEAMWORK 7 6. MOTIVATION 8 7. CREATIVITY 9 7.1. Components of creativity 9 8. CONCLUSION 12 9. BIBLIOGRAPHY 13 INTRODUCTION This report aims to provide an in-depth analysis of initiatives pursued by Lafarge as

Finance Essay

665 words - 3 pages Financial statements are the most common tool used for making business decisions. They consist of the balance sheet, income statement and statement of cash flows. The analysis tools used affect all aspects of a company not just a few. A systematic review of the resources a company used to achieve its mission is cost control. Cash flow should be kept at necessary levels for operations is one of the major benefits of cost control. It is a very

Analysis Of Operation Blue Star And Its Effects On The Gandhi Dynasty

934 words - 4 pages The period of time including and following Operation Blue star is considered a dark time in India and black spot in Indian history. It is a time Indian would rather forget, yet still to this day debate about. Was Indihar Gandhi correct in instating operation Blue Star, inflicting damage to the Golden temple, and being responsible for the killing of anywhere from 492 (official reports) to 1500 (estimates run as high as) civilians, which lead to an

Regretful Decisions Essay

930 words - 4 pages Regretful Decisions There are many individuals in a child’s life that helps mold them into a well-rounded adult. In most cases, this guidance comes from the child’s parents or other older, but in Sonny’s case, this guidance was expected from his older brother. In the short narrative, Sonny’s Blues, Sonny’s life was adversely affected by the decisions that his older brother made. The decisions that his brother made include leaving Sonny to stay