back to Organic Consumers Assn. Corporate Abuse page Chiquita sues European Commission over banana imports January 25, 2001 CINCINNATI - Chiquita Brands International Inc. is suing the European Commission in the latest chapter of a bitter trans-Atlantic fight over whether European trade officials illegally restrict Chiquita's banana imports. Chiquita, which says the banana quotas have cost the company millions of dollars, said Thursday that its lawsuit accuses the European Commission of failing to reduce trade barriers in response to a 1997 World Trade Organization ruling. The lawsuit was filed in Court of First Instance of the European Court of Justice. Chiquita still hopes to reach a settlement with the 15-nation European Union but decided the lawsuit might bring a quicker resolution, said Steven Warshaw, the company's president and chief operating officer. Chiquita's lawsuit demands $525 million in damages from the European Commission, and asks the right to demand future damages if the problems aren't corrected to the company's satisfaction. EU officials have said Chiquita's problems are of its own making and not the fault of Europe's trade officials. European Trade Commissioner Pascal Lamy said he could not comment on the case. "Wisdom shows me that when a company is in a difficult financial situation, it is not a good idea to comment on the reasons that brought them there," he said. Chiquita revealed last week that it is negotiating with bondholders for concessions intended to help the Cincinnati-based company work its way out of a multimillion-dollar debt and avoid a possible bankruptcy filing. Analysts said, however, that some of Chiquita's problems date to the early 1990s when management increased debt by expanding the company's shipping fleet, then didn't act to substantially reduce debt in the years when Chiquita was still fiscally healthy. Chiquita says it has been pushed to the brink of bankruptcy by the EU's system of tariffs and quotas, which restrict the sales of bananas marketed by U.S. companies. While Chiquita controls about 20 percent of the EU's 15-nation market, its share - and profit - have plunged since the rules were introduced in 1993. The trade battle began when the Europeans introduced import controls to protect their banana growers in the Canary Islands, Madeira and French West Indies, and traditional suppliers in African and Caribbean nations. The rules more than halved Chiquita's market share in the EU, where the company used to draw more than half of its profits, Warshaw said in a telephone interview. The dispute has poisoned relations between the EU and the United States for almost a decade. The U.S. government has vigorously supported Chiquita, accusing the EU of restricting free trade by unfairly protecting its producers and importers and pushing up prices for consumers. European officials counter that the Americans seek to bully small Caribbean and African producers out of business by pushing the interests of giant conglomerates that have cut costs by riding roughshod over workers' rights and environmental concerns.