The Union of Banana Exporting Countries (Spanish: Union de Paises Exportadoras de Banano or UPEB) was a Central/South American cartel inspired by OPEC. In 1974 Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, and Panama joined together in an attempt to form a banana grower's cartel.^[1] The Philippines was the only major banana exporting country which did not join.^[2] Logo The Organization of the Petroleum Exporting Countries (OPEC) is an international organization made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. ...

Banana prices had gone up little in 20 years. A UN study had recently concluded that no more than seventeen cents of each dollar spent by North Americans on bananas went to producing countries. At the time bananas were monopolized by three US companies: United Brands Company (formerly United Fruit), Standard Fruit, and the Del Monte Corporation.^[1] The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ... The United Fruit Company (1899-1970) became prominent in the import-export trade of tropical fruit (notably bananas and pineapples) coming from Third World plantations and sent to the United States and Europe. ... Now named Dole Food Company, Standard Fruit Company was established in 1924 by The Vaccaro Brothers. ... Del Monte Foods (NYSE: DLM) is an American food production and distribution company based in San Francisco, California. ...

UPEB proposed an export tax of one dollar for every forty pound box of bananas exported. The monopolies protested and threatened to withdraw their operations. There was also a glut on the world banana market and Ecuador, the leading producer, refused to enact the tax. Former Costa Rican president Jose Figueres stated that Standard Fruit's property should be nationalized if the monopolies refused to pay the tax. Standard Fruit threatened the new Costa Rican president, Daniel Oduber that if there was any more threats, the company would pull out of Costa Rica. Costa Rica dropped its demand to 25¢ a crate.^[1][3][4] Now named Dole Food Company, Standard Fruit Company was established in 1924 by The Vaccaro Brothers. ... Now named Dole Food Company, Standard Fruit Company was established in 1924 by The Vaccaro Brothers. ... Porfirio Ricardo José Luis Daniel Oduber Quirós served as President of Costa Rica from 1974 to 1978. ...

Bananagate

Women sorting bananas and cutting them from bunches.

In 1974 Honduras passed a law to raise the tax on banana exports from 25¢ to 50¢ per 40-pound box. Honduras had supplied more than 22% of United Brands Company exports in 1974.^[3][5] Image File history File links Banana_sorting. ... Image File history File links Banana_sorting. ... The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ...

The next year, Eli M. Black, the chairman and president of United Brands Company jumped to his death from the forty fourth floor of the Pan Am Building in Manhattan. When the Securities and Exchange Commission invesigated Black's suicide, it uncovered a scandal called "Bananagate". The United Brands Company had paid a $1.25 million bribe to Honduras President Oswaldo Lopez Arellano, followed by another $1.25 million dollars the next year. The money was to be put in a Swiss bank account. The operation was managed via then secretary of finance, Abram Bennaton--today he is a promiment businessman. After the bribe the Honduras tax was reduced from fifty cents to twenty-five cents per box. This caused the UPEB cartel to collapse. This reduction saved United Brands Company about $7.5 million in tax payments. In addition it was discovered that United Brands Company had paid another $750,000 in bribes to an Italian official to prevent restrictions on United's banana exports to Italy, beginning in 1970. The SEC determined that none of the bribes could have been paid without the knowledge and approval of Black. While it was not illegal at the time for US companies to bribe officials, it was illegal for companies to hide such bribes from their stockholders.^[1][3][6] Eli M. Black (1922?-February 3, 1975) was an American businessman who controlled the United Brands Company. ... The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ... The MetLife Building in New York City The MetLife Building, formerly the Pan Am Building, is located at 200 Park Avenue in New York City. ... The Borough of Manhattan, highlighted in yellow, lies between the East River and the Hudson River. ... The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ... The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ... The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ...

United Brands Company also admitted that it had tried to convince the SEC that the bribes should be kept secret, on the ground that disclosure would hurt the company and its stockholders. The company's Washington law firm, Covington and Burling, asked the State Department to intervene, arguing that news of the Honduran bribe could harm U.S. relations with that country. The State Department declined.^[4] The United Brands Company was the successor to the United Fruit Company, taking the new name in 1970 after United Fruit merged with the AMK Corporation. ... Covington & Burling LLP is a leading international law firm with offices in Brussels, London, New York, San Francisco, and Washington, DC. Founded in 1919, the firm advises multinational corporations on significant transactional, litigation, regulatory, and public policy matters. ...

When the bribe was revealed, it provoked the overthrow of the military government in Honduras and this in turn led to the nationalisation of United's railroads along with a major divestiture of land by the companies.^[7]

Later history

On May 1, 1975, Costa Rica passed a law to raise the tax on banana exports from 25¢ to $1 per 40-pound box. The decree stated that 45¢ of each tax dollar would go to the govenment and the other 55¢ to subsidize independent banana growers. United Brands' local subsidiary, the Costa Rican Banana Co., then filed a $3 million suit against the government in April 1975, stating that the export levy violated a government guarantee not to tax the company until its contract with the government expired in 1988.^[5]

Since its formation, the Union of Banana Exporting Countries has been largely limited to charging a modest tax on corporate banana exports.^[8]

Notes