A smuggling operation has been blamed as the factor behind poor pre-tax profits at Irish-based banana trader, Fyffes.
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The banana-smuggling racket with links to the Mafia was behind a 90% drop in pre-tax profits in the 14 months to 31 December from €83.9m (US$76.2m) to €7.5m, said chief executive Carl McCann
McCann revealed that an operation by Italian police and European Union fraud investigators busted the illegal banana shipments from Ecuador into the Sicilian port of Catania. The fraudsters used falsified import licences to carry out the smuggling operation. The operation is estimated to have swelled the EU’s 4.1m-tonne annual banana market by 5%, or 200,000 tonnes, putting downward pressure on prices.
Mr McCann said: “These people have been smuggling without a licence and without a quota. The additional supply has meant we were unable to pass on the higher dollar costs to our customers. Prices actually marginally declined when they needed to increase.”
McCann added that the smugglers operated in the key months of February to June, when supplies would normally be in short supply and prices at their highest.
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By GlobalData
