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Exotic fruit raids to probe price fixing

By Laura Crowley, 03-Dec-2007

Related topics: Fruit, vegetable, nut ingredients

European Commission antitrust authorities are investigating importers and producers of fresh exotic fruits under suspicions of running a cartel to fix prices.

The Commission carried out the inspections between Wednesday and Friday last week under concerns that the companies may have violated Article 81 of Treaty rules that outlaw cartels and restrictive business practices.

Exotic fruits are increasingly popular in Europe, particularly in light of growing claims on their various health benefits.

The cost of the fruits put forward to ingredients and food manufacturers would be affected by such price fixing. Should the importers and producers be found guilty of price fixing, this would have a knock-on effect on manufacturers.

The surprise inspections are a preliminary step in investigations into the allegations. There are no strict deadlines to complete cartel inquiries.

The Commission said: "The fact that the European Commission carries out such inspections does not mean that companies are guilty of anti-competitive behaviour, nor does it prejudice the outcome of the investigation itself."

Associated Press claimed that that Chiquita Brands International triggered the investigation by providing information and documents that saw it win conditional immunity from fines.

It alleged that two years ago Chiquita had discovered that some employees had shared pricing and volume information for Europe, where it has half of its global banana sales. However, the Commission would not comment on this, and Chiquita did not respond in time for publication.

No information has been provided on which companies are under investigation, however Irish importer and distributor of tropical produce Fyffes, which was accused of an illegal cartel in July, has said it was not raided.

Half a dozen banana import companies were targeted earlier this year by antitrust officials. According to reports, the companies under scrutiny included Fyffes, Cole, Chiquita, Del Monte and Noboa.

At the time, Fyffes confirmed it had received the Statements of Objections following EC inspections carried out at the premises of Fyffes and subsidiary Weichert in early June 2005. The company said it had fully complied with all requests.

Dole confirmed that the Statement of Objections had been adopted against one of the company's subsidiaries following searches carried out in 2005, but said it would strongly dispute the allegations.

"The company strongly disputes the European Commission's allegations of anti-competitive behavior and believes that Dole has not violated the European Union competition laws," said Michael Carter, executive vice president, general counsel and corporate secretary.

"Dole is proud of its reputation as one of the world's most ethical companies and will continue to cooperate with the European Commission in order to provide the Commission with a full and transparent understanding of the banana market," he added.

The banana industry has been dogged with controversy, with questions raised over the conduct of certain producers in growing areas such as South America.

A three-year US Department of Justice investigation into Chiquita's dealings in Colombia focused on payments made by the company to certain groups in Colombia designated under US law as foreign terrorist organizations.

The banana supplier pleaded guilty to making the payments through its Colombian subsidiary, but said it was "forced" to make payments to right- and left-wing paramilitary groups in Colombia to "protect the lives of its employees".

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