28th Nov 2005 15:24
Fyffes PLC28 November 2005 STOCK EXCHANGE ANNOUNCEMENT Fyffes expresses disappointment at proposed changes to banana regulations In a statement released to the Stock Exchange today, Fyffes plc said: "At a meeting in Brussels on Friday last, the Permanent Representatives of theMember States endorsed a Commission proposal to introduce a tariff of €176 pertonne on imports of third-country bananas from the start of next year. Fyffesregrets this decision, believing it is not in the best interests of theindustry. Assuming that this revision of the regime is formally ratified at aCouncil of Ministers meeting this week, the higher level of tariff will imposean additional €315 million duty burden on the European banana trade each yearand will increase Fyffes' duty costs by approximately €40 million per annum. Thenew regulations will also remove the current quota restrictions on imports fromcertain Latin American producing countries. The market impact of this change,particularly as regards selling prices, will take some time to assess. The EU's original proposals for a tariff-only regime were dismissed by a panelof WTO arbitrators on two occasions this year. The latest plan has been rejectedby the majority of stakeholders in the global banana trade. It will cause bananaimporters to seek higher selling prices from customers with a significantpotential knock-on effect for consumers. It will materially raise the cost tothe Community of income compensation for EU banana farmers. In addition it willresult in the demise of the banana industries in several Caribbean ACPcountries. It will also place enormous pressure on Latin American bananaproducers who will ultimately have to bear a major part of the cost of theadditional duty. The EU will require certain waivers from WTO rules in order to legally apply theproposed new system and is uncertain how the Latin American producing countrieswill respond in this regard. This has the potential to derail the WTO tradetalks in Hong Kong in December and to renew hostilities between the US and EUover bananas. Fyffes continues to advocate a negotiated settlement between theparties. Despite this development, Fyffes remains focused on maximising returns forshareholders. As already indicated to the market, the Group will deliversignificantly increased profits and earnings in the year ending 31 December2005. It continues to benefit from the strongest balance sheet in the industry,including large net cash balances and a property portfolio which should generatesignificant incremental value for shareholders in the near to medium term." 28th November 2005 For further information please contact: Brian Bell, Wilson Hartnell PRTel : +353-1-669 0030 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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