ASSIGNMENT

ON
INTERNATIONAL BUSINESS

CHIQUITA BRANDS INTERNATIONAL (A)

Submitted By;
Rejish Mathew
18PGDM036
Question 1
What role has politics played in the history of Chiquita Brands and its
predecessor?
Politics have played an imported role in Chiquita Brands since it was established in
1885. Some incidents are mentioned below
1. In 1911, UFC and Samuel Zemurray, were implicated in a conspiracy to
break US neutrality laws and overthrow the Honduran government
2. In 1911 & 1912 U.S. President Taft sent marines to Honduras to protect
UFC’s plantations from the instable government in those parts
3. Chiquita Brands International went into huge losses due to the policies set
up by the EU, putting restrictions and import duties on the import of
bananas.
4. A petition was filed against EU and Latin signatories to the framework
agreement in the USTR by Chiquita’s and Hawaii Banana Industry
association.
5. Kansas Senator Bob Dole was approached by Linder to put pressure on
Latin signatories. He did so because he thought that it will be easy to
negotiate with Latin countries than with EU.
6. Donations of $430000 and $525000 where given to both Republicans and
Democrats by Lindner in exchange for political help
Question 2
What role has protectionism played in the global banana market?
The practice by which a company protects its own national companies from
foreign competition by imposing tax on imports is called Protectionism. One major
reason why Chiquita is facing heavy loses is due to this practice as many countries
adopted this especially in the banana market.
Countries such as France, The United Kingdom, Italy, Portugal, and Spain in the
EC paired the tariffs with a number of less transparent, non-tariff barriers,
including quantitative restrictions, import licensing requirements, and import bans.
On the other hand, countries like Belgium, Denmark, Ireland, Luxembourg, The
Netherlands and Greece limited their protectionist policies to a straightforward
20%
Germany is the only country which is a free market for bananas in the European
Community as it lacks any banana producing colonies of its own
Non- EC countries like India also practice protectionism

Question 3

What should Lindner do about the EU’s banana policy? How should Bob Dole
respond to Lindner’s request?

The following actions can be taken by Linder;

1. He could try to start production of bananas in Europe in small amounts and
thus check the feasibility
2. He should give importance to exploring other markets like Japan and other
parts of Asia
3. Inorder to expand the existing market, Chiquita should offer something
unique like dried fruits and other canned variations to capture new customers

Bob Dole, instead of competing with Lindner, should collaborate with Lindner
and bring together their resources and expertise for the betterment of the
industry as a whole. This would benefit both parties.