Chiquita Brands International, Inc. (NYSE: CQB) commented on the agreement announced yesterday between the U.S. Government and the European Commission regarding their long-standing dispute over the European Union’s banana import regime. Chiquita stated that this agreement is expected to result in a partial recovery in future periods of the EU market opportunities previously available to Chiquita and Latin American producing nations. However, the Company still intends to proceed with the proposed restructuring of its parent company debt announced earlier this year. This restructuring initiative is necessitated by the cumulative effect on Chiquita of the EU’s discriminatory banana import regimes over the past eight years, as well as the accelerated weakening of European currencies in recent years. The agreement announced today will provide no compensation to Chiquita for past damages attributable to previous EU regimes.
The U.S.-EU agreement contemplates a partial redistribution of licenses for the import of Latin American bananas under a tariff rate quota system for historical operators that would take effect on July 1, 2001 and continue through the end of 2005. It also contemplates movement to a tariff-only system starting in 2006, which will require future consultations between the EU and banana supplying interests.
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Steven G. Warshaw, President and Chief Operating Officer of Chiquita, said: “Subject to establishment of definitive regulations for the new regime, we are pleased with this positive development for Chiquita and Latin American banana interests. We are grateful to those within the Office of the U.S. Trade Representative and the affected Latin American governments who have worked tirelessly to bring about a banana import regime that is compatible with the EU’s international trade obligations.”
Chiquita is a leading international marketer, producer and distributor of quality fresh fruits and vegetables and processed foods.
This press release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, including the implementation of the U.S.-EU agreement announced today regarding the EU’s banana import regime, the Company’s ability to reach agreement with holders of its parent company debt regarding a restructuring of such debt, the terms of any such restructuring, prices at which Chiquita can sell its products, the costs at which it can purchase or grow (and availability of) fresh produce and other raw materials, currency exchange rate fluctuations, natural disasters and unusual weather conditions, operating efficiencies, labor relations, actions of governmental bodies and other market and competitive conditions, many of which are beyond the control of Chiquita. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements.
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