Wednesday, October 14, 2009
Chiquita Brands International
Chiquita Brands International Inc. (NYSE: CQB) is a Cincinnati, Ohio-based producer and distributor of bananas and other produce, under a variety of subsidiary brand names, collectively known as Chiquita. Chiquita is the successor to the United Fruit Company and is the leading distributor of bananas in the United States. The company also owns a German produce distribution company, Atlanta AG, which it acquired in 2003. Chiquita was formerly controlled by Cincinnati billionaire Carl H. Lindner, Jr., whose majority ownership of the company ended as a result of Chiquita Brands International exiting a prepackaged Chapter 11 bankruptcy on March 19, 2002. The enterprise changed its name to Chiquita Brands and operates with that name to this day.
The trademark logo mascot, Chiquita Banana, was created by Dik Browne, who is best known for his Hägar the Horrible comic strip. 1940s vocalist Patti Clayton was the original 1944 voice of Chiquita Banana, followed by Elsa Miranda, June Valli and Monica Lewis. Advertisements featured the banana character wearing a fruit hat. The banana was changed into a woman in the 1980s
Chiquita Brands International Inc. was formed in 1871 by U.S. railroad entrepreneur Henry Meiggs as the United Fruit Company. It was reformed in part by an Italian entrepreneur in Boston when the company changed its shipping practices. In 1970 it became the United Brands Company when it was purchased by Eli Black. He outbid two other conglomerates, Zapata Corporation and Textron, for a controlling interest in the company. Black would later take his own life over a scandal in 1975. In 1985 the company became Chiquita Brands International.
In 1928, thousands of workers were assassinated by military forces in Ciénaga (Colombia). The workers were protesting against the bad working conditions in the company plantations. This episode is known in the history of Colombia as the Masacre de las Bananeras (Banana massacre). Gabriel García Márquez describes in his novel One Hundred Years of Solitude the inhuman impact that had the company in Colombia.
In 1975, an SEC invesitgation revealed that the company had bribed the Honduran President (dictator): Oswaldo López Arellano and Italian officials. The scandal was named Bananagate.
In the 1980s, the company (then known as United Brands Company) was involved in a leading Competition Law case when they were found to abuse their dominant position in the banana and fruit supply markets by the European Commission.
The Cincinnati Enquirer controversy
On May 3, 1998, The Cincinnati Enquirer published an eighteen-page section, "Chiquita Secrets Revealed". Written by Enquirer investigative reporters Michael Gallagher and Cameron McWhirter, the articles accused the company of mistreating the workers on its Central American plantations, polluting the environment, allowing cocaine to be brought to the United States on its ships, bribing foreign officials, evading foreign nations' laws on land ownership, forcibly preventing its workers from unionizing, and a host of other misdeeds.
Chiquita denied all the allegations, and sued after it was revealed that Gallagher had repeatedly hacked into Chiquita's voice-mail system (no evidence ever indicated that McWhirter was aware of Gallagher's crime or a participant). A special prosecutor was appointed to investigate—the elected prosecutor having ties to Carl Lindner, Jr.. On June 28, 1998, the Enquirer retracted the entire series of stories, published a front-page apology, and paid the company a multi-million-dollar settlement. The Columbia Journalism Review reported both $14 million and $50 million for the amount. Chiquita's Annual Report mentions 'a cash settlement in excess of $10 million'. One of the reporters, Gallagher, was fired and prosecuted and the paper's editor, Lawrence K. Beaupre, was transferred to the Gannett's headquarters amid allegations that he ignored the paper's usual procedures on fact-checking in order to win a Pulitzer Prize. Chiquita has not formally challenged any of the claims raised in the original articles.
Payments to paramilitary groups
On March 14, 2007, Chiquita Brands was fined $25 million as part of a settlement with the United States Justice Department for having ties to Colombian paramilitary groups. According to court documents, between 1997 and 2004, officers of a Chiquita subsidiary paid approximately $1.7 million to the United Self-Defense Forces of Colombia, the AUC, in exchange for local, employee protection in Colombia's volatile banana harvesting zone. Similar payments were also made to the Revolutionary Armed Forces of Colombia (FARC), as well as the National Liberation Army (ELN) from 1989 to 1997. All three of these groups are on the U.S. State Department's list of Foreign Terrorist Organizations.
On March 19, 2007, Chiquita Brands admitted in federal court that the subsidiary company (which was subsequently sold) paid Colombian terrorists to protect employees at its most profitable banana-growing operation. As part of a deal with prosecutors, the company pleaded guilty to one count of doing business with a terrorist organization. In exchange, the company will pay a $25-million fine and court documents will not reveal the identities of the group of senior executives who approved the illegal protection payments.
Chiquita currently faces serious charges in a lawsuit issued in June 2007. According to the attorney of 173 family members of victims of the AUC militia this could be the biggest terrorist case in history and may put Chiquita out of business. "Terry Collingsworth, a lawyer with International Rights Advocates who is leading the multi-million dollar litigation, said: "This is a landmark case, maybe the biggest terrorism case in history. In terms of casualties, it's the size of three World Trade Center attacks."
Despite reaching a deal with US prosecutors, Chiquita Brands International still may have to face criminal charges in Colombia, which could even include the extradition of some of its current and former board members. Specifically, on December 7, 2007, "the 29th Specialized District Attorney's Office in Medellín called the board members of Chiquita […] to make statements concerning charges for conspiracy to commit an aggravated crime and financing illegal armed groups. The court order mentions Robert Fisher, Steven G. Wars, Carl H. Linder, Durk Jaguer, Jeffrey Benjamin, Morten Amtzen, Roderick Hills (former committee director of Chiquita), Cyrus F. Freidheim (former general director and most recently president and CEO of a large media group), and Robert Olson, former legal counsel. The nine of them, according to the initial data obtained by the Attorney General's Office, knew of the illegal operation through which 1.7 million dollars were transferred to the AUC, a charge to which Chiquita has already admitted and for which the US justice system fined it 25 million dollars
Alleged ongoing workers' rights violations
In May 2007, the French NGO "Peuples Solidaires" publicly accused the Compañia Bananera Atlántica Limitada (COBAL), a Chiquita subsidiary, of knowingly violating what the NGO describes as "its workers' basic rights" and endangering their families health and their own. Allegedly, the banana firm has carelessly exposed labourers at the Coyol plantation in Costa Rica to highly toxic pesticides on multiple occasions. Additionally, the human rights group accuses the company of using a private militia to intimidate workers. Finally, Peuples Solidaires claims that Chiquita, despite a regional agreement between the company and local unions requiring prompt investigation of grievances, has ignored certain union compliants for more than a year
^ "Prettying Up Chiquita". Time (magazine). September 3, 1973. http://www.time.com/time/magazine/article/0,9171,910767-1,00.html. Retrieved 2008-08-22. "In fact, that is a condensed version of what has actually happened to United Fruit Co., famed in the U.S. for Chiquita bananas, but known to generations of Latin Americans as "el Pulpo" (the Octopus). The Talmudist is Eli Black, who in 1970 merged United Fruit into a food-based conglomerate that he was assembling, and has proceeded to change its operations, its image, and even its name, to United Brands Co. The payoff: United Brands has gone from a net loss of $24 million in 1971 to a net profit of $10 million for this year's first half alone. Last year sales rose 13% to nearly $1.7 billion, less than a third of it from bananas."
^ Michael Evans, 'Para-politics' Goes Bananas, The Nation, 4 April 2007
^ a b Matt Apuzzo, Associated Press writer, Chiquita to Pay $25M Fine in Terror Case, ABC News, 15 March 2007
^ Chiquita faces Colombia lawsuit, Al Jazeera, June 7, 2007
^ Extraditions Cut Short, Jose Alvear Restrepo Lawyers' Collective, May 25, 2008
^ Chiquita Indegestible Bananas, Peuples Solidaires, From 7 May to 30 June 2007
 Further reading
Bender, Nicholas (May/June 2001). "Banana report". Columbia Journalism Review.
Frantz, Douglas (July 17, 1998). "After apology, issues raised in Chiquita articles remain". The New York Times: pp. A1, A14.
Frantz, Douglas (July 17, 1998). "Mysteries behind story's publication". The New York Times: p. A14.
Stein, Nicholas (September/October 1998). "Banana peel". Columbia Journalism Review.
Mike Gallagher & Cameron McWhirter, "Chiquita Secrets Revealed," Cincinnati Enquirer, May 3, 1998.
"The Business and Human Rights Management Report—Chiquita Brands International", Ethical Corporate Magazine, Nov. 2004.
Bucheli, Marcelo (2005). Bananas and Business: The United Fruit Company in Colombia: 1899-2000. New York: New York University Press. http://books.google.com/books?id=kUfnWhn6H7gC.
Bucheli, Marcelo (July 2008). "Multinational Corporations, Totalitarian Regimes, and Economic Nationalism: United Fruit Company in Central America, 1899-1975". Business History 50 (4): 433–454. doi:10.1080/00076790802106315.
Bucheli, Marcelo (November 2005). "Banana Wars Maneuvers". Harvard Business Review 83 (11): 22–24. http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=F0511E&referral=2340.
Bucheli, Marcelo; Geoffrey Jones (2005). "The Octopus and the Generals". Harvard Business School Case (9-805-146). http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=805146.
Bucheli, Marcelo, "The United Fruit Company in Latin America: Business Strategies in a Changing Environment", in Jones, Geoffrey; Wadhwani, R. Daniel, Entrepreneurship and Global Capitalism, 2, Cheltenham (UK): Edward Elgar, 2006, pp. 342–383, http://www.e-elgar.co.uk/Bookentry_contents.lasso?id=3844 .
Bucheli, Marcelo (Summer 2004). "Enforcing Business Contracts in South America: The United Fruit Company and the Colombian Banana Planters in the Twentieth-Century". Business History Review 78 (2): 181–212. http://www.hbs.edu/bhr/archives/vol78/vol78-2004summer.html.
Bucheli, Marcelo; Read, Ian, "Banana Boats and Baby Food: The Banana in U.S. History", in Topik, Steven; Marichal, Carlos; Frank, Zephyr, From Silver to Cocaine: Latin American Commodity Chains and the Building of the World Economy, 1500-2000, Durham: Duke University Press, 2006, http://books.google.com/books?id=mnvBYQqpJbQC&dq=from+silver+to+cocaine&source=gbs_summary_s&cad=0
Bucheli, Marcelo, "United Fruit Company in Latin America", in Moberg, Mark; Striffler, Steve, Banana Wars: Power, Production, and History in the Americas, Durham: Duke University Press, 2003, http://books.google.com/books?id=Fv2VH9LGQqoC&dq=banana+wars&source=gbs_summary_s&cad=0 .
Bucheli, Marcelo, "United Fruit Company", in Geisst, Charles, Encyclopedia of American Business History, London: Facts on File, 2005, http://books.google.com/books?id=KfuAGwAACAAJ&dq=charles+geisst+encyclopedia .
Bucheli, Marcelo, "United Fruit Company", in McCusker, John, History of World Trade Since 1450, New York: Macmillan, 2004, http://books.google.com/books?id=49T1AQAACAAJ&dq=john+mccusker .
Taylor, Gary; Patricia Sharlin (2004). Smart Alliance: How a Global Corporation and Environmental Activists Transformed a Tarnished Brand. New Haven: Yale University Press.
"The Importance of Corporate Responsibility", Economist Intelligence Unit, Jan. 2005.
"Chiquita Brands: A Turnaround That Is Here to Stay", Winslow Environmental News, January 2004.
"The banana giant that found its gentle side", Financial Times, Dec. 2002
'"Chiquita Wins Raves for Outstanding Sustainability Reporting", Greenbiz.com, April 3, 2003
 See also
Union of Banana Exporting Countries
United Fruit Company
 External links
Chiquita Brands International official site
United Fruit Historical Society: This site contains a detailed chronology of the history of Chiquita, biographies of the company's main protagonists, and an extensive bibliography.
Counterpunch, 17 July 2009, From Arbenz to Zelaya: Chiquita in Latin America with video report by Democracy Now!