Last March, Chiquita of the US, the largest banana trading company in the world
and a successor company to the United Fruit Company
of Banana Republic fame, and
Fyffes of Ireland, one of the main suppliers to the European market, announced a
merger, making the new company ChiquitaFyffes, an undisputed leader in the
According to the United Nations Food and Agriculture Organisation (FAO) together
the two companies control 18.7% of global banana exports, substantially more
than its closest competitors, del Monte (12.2%) and Dole (11.4%). Chiquita
supplies mostly the US (61% of the company’s banana sales), while Fyffes
supplies primarily Europe (81% of banana operations). As a result of the merger,
47% of the operations will take place in the US, 46% in Europe, with the
remaining 7% accruing to other markets.
Despite the continued importance of multinational companies in the global trade
of bananas, their involvement in banana production has fallen dramatically over
the past three decades, shifting their sphere of action to favor other areas in
the sector and opening the door to opportunities for other companies.
This view of the
changing nature of the global banana trade is captured in
a new FAO information
note [pdf] and based on analysis of information gathered from the annual reports of
the largest multinational banana trading companies.
FAO's review of
the three largest banana traders (Chiquita, Dole and Del Monte), shows that the
combined market share of the top three companies was at its highest the 1980's,
when they controlled almost two-thirds (65.3%) of global banana exports,
while in 2013, their market share was slightly over one-third (36.6%).
In 2013, the
market share of the top five companies was 44.4%, down from 70% in
among banana producing countries is fierce and many have struggled to remain
competitive, but there are also new opportunities, as the market is no longer
dominated by big players - and new buyers are entering the market," says
Ekaterina Krivonos, an economist at the Trade and Markets Division of FAO.
note shows that the scope of operations of the big multinationals has also
undergone a significant shift, away from plantation ownership and production,
and more towards post-production logistics, including purchasing from producers,
transportation, facilities to ripen the fruit, and marketing.
supermarket chains in the United States and the European Union, meanwhile, have
become "important players in the global banana trade as they dominate the retail
market in the main banana-consuming countries and are also increasingly
purchasing from smaller wholesalers or directly from growers," the note
This shift of
market power away from the major banana brands towards retailers was facilitated
by the establishment of direct container liner services from banana producing
regions to the main destination markets. Moreover, there is a parallel trend
towards less concentration among the exporting firms in the major banana
producing countries, for example in Ecuador.
information note, FAO points out that while the merger that formed
ChiquitaFyffes made the new company an undisputed leader in the banana market,
with 18.7% control of global banana exports, "it is unlikely that the
merger will give the new company sufficient market power to exert pressure over
the banana market and influence either producer prices or import/wholesale
prices, given the importance of other market actors, in particular in Europe and