More than 90% of internationally traded bananas are produced on massive mono-crop plantations in Latin America, West Africa and the Philippines. These plantations are mostly controlled by just five companies.

The two largest producer and marketers of bananas are both US-based companies: Dole Food Co. (formerly Standard Fruit) and Chiquita Brands International (formerly known as the United Fruit Company, then United Brands). Each accounts for just over a quarter of all bananas traded internationally.  Then comes Fresh Del Monte Produce, controlled by the Chilean-based IAT Group (capital held in the United Arab Emirates), and controlling some 15% of the banana trade. Fresh Del Monte Produce headquarters is Miami, USA. The fourth biggest banana export company is Exportadora Bananera Noboa (Bonita brand), part of the largest Ecuadorian conglomerate, Grupo Noboa, that controls a quarter of Ecuador’s exports and therefore some 9% of total world trade.  In fifth place is the Irish fruit company Fyffes with an estimated 7% share. Fyffes has grown to control nearly 20% of the EU-25 market (in second place to Chiquita), but has almost no production of its own.

Because of their size, the companies are very powerful both in exporting countries and in their country of origin. Today, they set producer countries competing with each other, pressuring governments to accept favourable policies on corporate taxation, export taxes, preferential access to loans, and deregulation of social and environmental policies. In 1992, for instance, the government of Panama, which had attempted to apply an increase in the minimum wage, had to step down after Chiquita threatened to withdraw contracts with the local growers. In 2005, Dole and Del Monte threatened to pull out of  Costa Rica if the government did not change its position on the UE import regime. The threat was enough to get the Costa Rican government to do an about-turn. Fyffes, although it is only a trading company and has no production retains very considerable influence in Belize and did so in Suriname until the industry was restructured in 2004. Dole's influence in the governments of Cameroon and the Ivory Coast is similarly very strong. Companies have an equally strong influence in industrialised countries on the implementation of food and trade policies. Chiquita, for instance, was at the origin of the complaint against the European banana import regime that the US government brought to the World Trade Organisation in 1995.

The three big multinational banana companies and Noboa are integrated vertically up the chain. This means that they own or contract plantations, own sea transport and ripening facilities, and have their own distribution networks in consuming countries (above all in the United States). It gives them considerable economies of scale, and they can sell dollar bananas on the Northern markets at a very low price. They tend to repatriate profits to their countries of origin. According to figures from the French research institute CIRAD, only 12% of the final retail price stays in the producing countries. An even smaller proportion goes to small farmers (5-7 per cent) or to plantation workers (1-3 per cent).

In recent years, these big companies have tried, as a general rule, to free themselves of direct ownership of plantations, in favour of guaranteed supply contracts with medium- and large-scale producers in the countries where they operate. Amongst other benefits, it allows the Northern-based companies' headquarters to shift responsibility for labour and environmental conditions onto local producers.

The practices of the big banana companies do not vary substantially from company to company, although some have shown a more serious approach to ethical, social and environmental issues in recent years. However, the economic reality of the current ‘race to the bottom’ means that the business of producing large amounts of cheap, unblemished bananas favours very intensive methods of production requiring large volumes of chemicals (second only in quantity used to the cotton industry). Working conditions are often poor; in particular the lack of freedom for workers to organise independent trade unions and to negotiate collective agreements with their employers, low wages which in many countries do not cover the basic needs of the worker's family, very long working days and exposure to hazardous chemicals. Independent banana workers' trade unions across Latin America have come under increasing attack from both transnational banana companies and independent banana producers. Lay-offs, plantation closures, contract renegotiations, spurious civil suits and trumped-up criminal charges against union leaders - even violence - have become the order of the day in several countries. (See Social and Environmental Costs and  Trade Union Movement.)

Senior Executives of Dole, Del Monte and Chiquita (not Fyffes) met together with Latin American and Filipino trade union representatives for the first time ever in May 2000 to discuss a way out of the emerging crisis. The companies and unions agreed to set up a 'Permanent Committee' that would meet at least twice a year. Although this was an historic first step, only Chiquita has followed this up by signing an agreement on workers' rights with COLSIBA (the Latin American Banana Workers' Union Coordination) and the International Union of Food and Agricultural Workers (IUF) in June 2001. Further pressure is needed on the companies to take these issues seriously. (See Alternatives for the Future for more information).

Shifting Power

Although multinational fruit companies still do have a very strong influence, there is increasing pressure from ‘upstream’ players in the major consuming countries to limit their power, notably from the big retailers. These companies (see Supermarkets), especially in North America and Europe now set prices, whereas, in the past, it was their suppliers – the fruit companies – who called the shots. Now the big retailers are trying to alter their suppliers’ behaviour through codes of conduct, but without - so far at least - being prepared to pay the price.

An economic crisis, provoked by overproduction in the industry, has hit all players in the banana supply chain hard. Since late 1998, the multinationals’ response has been to cut back operations and reduced wages and benefits paid to workers. The only players in the chain to make big profits on their sales of bananas are the supermarkets, especially in Britain, Ireland and France, where retail margins are under less pressure from the so-called ‘hard discount’ chains like Aldi, Lidl and Netto. Even after the recent round of retail price wars in the UK, supermarkets take between 35% and 40% of the consumer price, compared to around 2% going to pay the wages of the men and women who do the hardest work – inside the plantations.

However, the multinationals remain very large companies: the total banana export revenue of the main ACP countries, for instance, is equivalent to just 15% of Dole’s banana sales. The total revenue of the ‘big three’ companies amounts to the total of the African and Caribbean export revenues (all sectors taken together).

The exact structures of the multinationals are in continuous flux as plantations, companies and subsidiaries are bought and sold. The EU’s shift to a tariff only import regime (in January 2006) has led to a reappraisal by the companies of their assets and the pressure is on for them to move out of countries where environmental and social standards are relatively high and towards countries where legislatve controls are weak and independent trade unions largely absent.

Further Reading

Big But Not Beautiful: The Banana Companies Leaflet

The Banana Trade