Beleaguered banana operators this week found themselves under fire once again.

As retail prices continue to languish, national daily The Guardian has alleged that the use of subsidiary companies registered in low-tax or zero-tax zones is leaving growers and governments of the fruit-producing countries out of pocket.

The newspaper alleged in its report on Monday that Chiquita, Dole and Fresh Del Monte have all been routing trade through tax havens, and that in times gone by, so too did Fyffes and Geest.

“I really don’t understand what they are trying to have a go at,” said one banana industry insider of the journalists who wrote the report. “They talk about ‘driving down costs’, but make no mention of the enormous pressure on price. Retails are now back down at 40 per cent of where they were six years ago. The article says ‘bananas are highly profitable’ but I am surprised anyone has any money to invest offshore or anywhere else. There is just no money in it.”

The Guardian conceded that the shifting of transactions between different countries to minimise tax bills is not new and certainly within the bounds of the law, but complains that this flight of capital is depriving the countries in which the profits were earned - ie where the bananas were grown - of raising revenue.

Chiquita’s director of corporate communications Mike Mitchell told freshinfo that the company is compliant with tax laws. “It is Chiquita’s policy to comply with tax law in every jurisdiction in which it does business, including paying...all tax legally due,” said Mitchell. “Chiquita does not break down earnings by country.

“However, a significant portion of Chiquita’s earnings occur outside the US, where they are subject to taxation at the applicable local tax rate. In nearly all countries where we operate, this is at an average rate less than the statutory US rate. Tax on these earnings is not normally accrued in the US, because the earnings have been or are expected to be, permanently reinvested outside the US.

“We incur substantial costs in the US, where most of our corporate overhead expenses and almost all interest expense on the company’s outstanding debt are located.”

Dole’s director of worldwide corporate social responsibility Sylvain Cuperlier said: “The article does not mention the fact that some of the banana companies including Dole have substantial debts which contribute to decreased tax payments.” He added its argument linking reduced tax payment to worker conditions was unclear.

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