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Case Report: Blood Bananas: Chiquita in Colombia

In: Business and Management

Submitted By busi
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Summer
2013
Summer
2013
Case Report: Blood Bananas: Chiquita in Colombia

BUSA 4980

Chiquita Brands international was founded in 1899 after the merger of United Fruit Company and the Boston Fruit Company. As bananas be came more of a staple in every home so do Chiquita Bananas. Bananas are know to mainly grown in tropical places like Central America, Africa and Southeast Asia. Chiquita decided to have operations out of Colombia. During this time there was turmoil in Colombia and different terror groups form “against the government” & other wealthy people in the country. Some of these groups settled in the areas where Chiquita had facilities.
Chiquita run into problems with theses groups around 1997, mainly with FARC (Revolution Armed Forced of Columbia) and AUC. They began to kidnap and kill employees of this company. The terrorist groups began asking for money in turn they would stop harming their employees. For Chiquita this decision to pay the AUC seem to be an easy one because or the lack for government and the lack of laws in place.
There are many key issues that lead Chiquita Banana’s decision to pay the terrorist groups the FARC & the AUC. One key issues the increasing demand for bananas in new countries like Russia, China and other countries in the Middle East. Chiquita felt as if it had pressure to obtain and grow in these markets. Along with those new markets, Chiquita had their current demand in established markets like the United States and Europe. On average US consumes 27 pounds of bananas per person per year. In Europe its about 20 pounds per person per year. Chiquita also had issues in it Corporate Governance Mechanisms.
At least three of Chiquita’s top executives had a part in the decision to pay the AUC. One key individual in Chiquita’s choice to pay the AUC was Roderick Hill; he was the head of the Board of Directors...

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