Geest slumps as Latin bananas swamp Europe: Market hit by glut ahead of new Community import quotas
Thursday 06 May 1993
A glut of bananas in Europe, created by exceptionally large supplies from South America ahead of a new quota regime based on historical import volumes, has forced down prices.
The new quotas come into effect on 1 July and stem from the creation of the European single market. Countries with colonial histories like Britain and France used to import from their empires, while the US and Germany imported cheaper bananas, mostly from South America.
Geest said that the French government's move to limit banana imports was also a problem.
Leonard van Geest, chairman, said: 'As a consequence of these developments and the unexpected market conditions . . . we anticipate little profit being made in the first half of 1993.'
Stockbrokers' analysts have now cut their estimates for the year to next March's pre-tax profit from pounds 26m to pounds 10m- pounds 13m, depending on how quickly the new European banana regime is enforced.
Geest shares fell 106p from 434p to 328p in early trading but recovered later to close at 328p. Shares in Fyffes, another UK company heavily dependent on bananas, fell 10p to 100p.
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