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December 16, 2009

IRELAND/EU: Fyffes benefit from EU banana deal questioned

Fyffes has been named as a possible beneficiary of the EU deal on banana tariffs although industry experts have argued that it remains to be seen what impact the deal will have on the Ireland-based fruit giant.

By Dean Best

Fyffes has been named as a possible beneficiary of the EU deal on banana tariffs although industry experts have argued that it remains to be seen what impact the deal will have on the Ireland-based fruit giant.


The long-running banana trade dispute between the EU, parts of Latin America and US fruit companies officially come to an end yesterday (15 December) after a final agreement was published in Geneva.


After years of critcism that the EU gave preferential treatment to imports from former European colonies, the EU will immediately cut import duties on Central and South American bananas.


Tariffs will be cut from EUR176 a tonne to EUR148 a tonne. The duty will be further reduced to EUR114 a tonne over the next seven years.


Fyffes, a key importer of bananas into the EU, is being seen as a winner from the deal due to its current hefty tariff bill.


The company confirmed to just-food that it absorbs EUR100m in tariff costs a year but declined to comment further.


However, some industry watchers have questioned whether lower tariffs will automatically benefit Fyffes, with lower selling prices for bananas a genuine prospect.


Paul Meade of NCB Stockbrokers said it was unclear just what impact the agreement will have on Fyffes, which generates a significant chunk of its profits from bananas.


However, Meade indicated there are questions over how prices will be affected by the tariff reductions.


“The real issue is whether [Fyffes] will be able to maintain prices,” Meade told just-food.

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