Chiquita-Fyffes Merger Said to Generate 40 Million Dollars in Annual Cost Savings by 2016
Earlier this week, Chiquita and Fyffes agreed to merge to create the world’s largest banana supplier, representing a combined total of $1.07 billion (€770 million) and creating annual cost savings of $40 million by 2016 on top of lowering Chiquita’s taxes since the combined company will be in Ireland, according to a press release. For the consumer, some analysts claim such a merger could potentially lower banana prices, which is just as significant for ChiquitaFyffes because it could help the company gain more share of the market, according to MarketWatch.
“Because it’s one of the most consumed fruits, prices really matter,” says IBISWorld analyst Antal Neville. “So the merger could mean cost savings for consumers.”
MarketWatch reports that in 1970 Americans ate almost seven pounds of bananas per person. By 2010, they were eating more than ten pounds. Global exports climbed to a record high of 16.5 million tons in 2012, a 7% increase from 2011 numbers, more than half of which was supplied by the U.S. and Europe.
Regardless, we should also stay aware of the banana plague that has struck Asia and parts of Australia. If it reaches the Caribbean or Latin America (where about 82% of bananas are exported, according to 2011 data from the Food and Agriculture Organization of the United Nations), prices may actually increase. Neville notes that if prices do start to increase, some businesses may choose to “raise prices on things like smoothies and muffins that contain bananas” rather than bananas themselves to avoid alienating consumers.
Stay tuned to AndNowUKnow as we continue following the ChiquitaFyffes merger.
