United Fruit’s struggles in the post-World War II continued well into the second half of the 20th century. In 1965, the United Fruit Company was forced to inform its shareholders that an analysis performed by John Moody (a prominent stock surveyor) predicted an expected 15% reduction in revenue, in part due to new antitrust legislation being implemented in the United States.¹ This new antitrust legislation, part of a bigger policy known as the Sherman Act, posited that United States held jurisdiction over the activities of US companies involved in “foreign nations.” The Sherman Act suggested that the US government would be able to prosecute a company’s illegal acts, even if the acts were legal in the nation where they were doing business.² For example, cash payments to foreign government officials would be treated as a crime in the US, even if it was not illegal in the country where a company operated. This proved to have major impact on many multinationals at the time and especially on United Fruit, which was already being exposed for its allegedly unethical business practices.

While United Fruit also faced challenges in Ecuador. The banana industry was seeing a slow growth rate in the country due to the Sigatoka plant disease. Because of the disease, Ecuador was unable to compete with other banana producing countries. In the 1960s, banana yields plummeted as the disease spread among banana plantations, despite the efforts of United Fruit to provide information about the disease to growers.³

Business was not going very well in 1966 for the Colombian region of Magdalena either. During this year, a severe hurricane wiped out 45% of banana crops.⁴ This was in the midst of the effort to change the type of banana grown from a Gros Michel to the Valery in response to the Panama botanical disease. With little support from the government or the United Fruit Company, production came to almost a standstill in the area. Further, in April, the Colombian Congress passed an economic measure limiting and regulating foreign trade until the 1990s. Knowing the losses that would come from such a decree, United Fruit frantically attempted to sell off its assets in the country. Some of the assets did not sell profitably and by the middle of the year, United Fruit had to seek the help of Incora to liquidate its assets.⁵

Just two years after United Fruit was forced to inform its shareholders of a potential major loss in revenue, in 1967, John Moody retracts his previous analysis and suggested that shareholders hold onto their stocks in the company.⁶ Moody hinted at the promise of potential growth in the company in the following years.

1968 proved to be a year that made an impact on the monopoly that United Fruit held over the banana industry. It was the year that banana producers in Uraba, Colombia, stood in protest against the company. The United Fruit Company, still recovering from its losses in Panama due to the botanical disease, had offered to buy bananas at roughly half the price previously paid, despite the fact that shortages had driven prices sharply higher. United Fruit thought it had an upper hand by being the only marketing company functioning in the area. However, this time, they were met with backlash.

Locals united against the banana company and formed their own union, rejecting United Fruit’s original offer. Local banana farmers formed the Union de Bananeros de Uraba in 1968 in protest against the UFC monopoly.⁷ However, this meant that could not rely on the transport facilities and technical assistance controlled by the company.

These events led to the creation of Turbana in 1969. Based in Miami, Florida, this marketing company moved to provide many of the logistical services once provided by the UFC. This brought a huge shift in the banana industry and opened the doors for more competitors to enter the fruit market.

Post-World War II was a tragic time for United Fruit’s assets and profits. United Fruit’s assets had peaked in the 1920s. By 1970, the company had a negative valuation.⁸

Because of the decreasing value and uncertain social/political environments in Latin America, United Fruit had to find a way to survive. Thus, in 1970, United Fruit and the AMK Corporation merged to create United Brands. This meant that United Fruit had joined the ranks of big food conglomerates. It was no longer a brand that specialized in fruit exportation and marketing, but also involved in processed foods and meat packaging.⁹ The first president of United Brands was Eli Black who emphasized the struggles the newly merged company would face, citing “nationalist aspiration” as the greatest challenge of doing business in Latin America.

In 1970, there were clashes with the newly formed brand over the use of canals in Uraba. The Colombian government sided with local banana exporters, who were using canals originally built by United Brands to better transport bananas to ships at sea. This meant that United Fruit was forced to allow local access to the canals.

Then, in 1971, the Colombian government started to provide subsidized loans to aid local exporters in building a port in Uraba. This would give locals the leg up they needed to really step out into the international fruit market.¹⁰ United Brands had little to no leverage against the government and therefore had to accept local competition in the banana market.

The 1970s saw a big change in the banana market as more competitors dove into the industry. In 1972, United Brands began losing market share to Standard Fruit. Standard Fruit and Castle and Cook had recently merged, as had Del Monte and the West Indies Fruit Company. Del Monte purchased a lot of the United Brands’ Guatemalan banana plantations, which made Del Monte a significant competitor.¹¹

With the success of Uraba’s unionization and move to more serious cooperative efforts, other Latin America states started to follow suit and in 1974, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, Colombia and Ecuador joined efforts to create the Union of Banana Exporting Countries (UPEB).¹² Banana producing countries had seen the success of the Organization of Petroleum Exporting Countries (OPEC) moves against foreign multinationals and chose to collaborate in a similar fashion. The most dramatic change that came from this effort was the shift from long-term contracts to specified taxes on each carton of bananas exported.

Because political changes occurring in Latin America, multinationals such as United Brands and Standard Fruit, were exposed in June 1974 for allegedly plotting the assassination of Panama’s president, Omar Torrijos. However, after UPEB began operating in September 1974 and a change in Panamanian government occurred, the conflict was resolved. Thanks to UPEB and banana export taxes, banana producers were able to see significant profit. In 1974, earnings went up from $25.4 million to $44.5 million.¹³

United Brands returned to the spotlight in a new controversy of 1975 when it was discovered by the Securities and Exchange Commission that Eli Black had bribed the Honduran president. The bribes were made to reduce banana export taxes.¹⁴ Then, in February, Eli Black jumped to his death from the 44th floor of his office building. Amongst allegations and investigations, the company was now without a leader and in major legal trouble. It was later uncovered that bribes had been made elsewhere in the Americas and in Europe as well. United Brands pushed all the blame onto Black, and Black’s replacement Wallace W. Booth sought to convince the public that the board of directors had been neither aware nor involved in any of the corrupt acts.¹⁵

(Cover image: Ingfbruno, CC BY-SA 3.0 https://creativecommons.org/licenses/by-sa/3.0, via Wikimedia Commons)

1Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 66.

2Extraterritorial Antitrust Enforcement: The American Banana Case a Half Century Later, 26 Fordham L. Rev. 319 (1957). Page 319.

3Tucker, Richard P. “Banana Republics: Yankee Fruit Companies and the Tropical American Lowlands.” In Insatiable Appetite: The United States and the Ecological Degradation of the Tropical World. Page 164.

4Bucheli, Marcelo. “The United Fruit Company’s Relationship with Local Planters in Colombia.” In Bananas and Business: The United Fruit Company in Colombia. Page 168.

5Bucheli, Marcelo. “The United Fruit Company and Local Politics in Colombia.” In Bananas and Business: The United Fruit Company in Colombia. Page 109.

6The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 66.

7Bucheli, Marcelo. “The United Fruit Company’s Relationship with Local Planters in Colombia.” In Bananas and Business: The United Fruit Company in Colombia. Page 174.

8Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 57.

9Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 66.

10Bucheli, Marcelo. “The United Fruit Company and Local Politics in Colombia.” In Bananas and Business: The United Fruit Company in Colombia. Page 111.

11Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 71.

12Tucker, Richard P. “Banana Republics: Yankee Fruit Companies and the Tropical American Lowlands.” In Insatiable Appetite: The United States and the Ecological Degradation of the Tropical World. Page 174.

13Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Pages 72-73.

14Lennerfors, Thomas Taro, and Peter Birch. “Fruit Companies and Marketing Boards.” In Snow in the Tropics: A History of the Independent Reefer Operators. Page 218.

15Bucheli, Marcelo. “The United Fruit Company in Latin America: Business Strategies in a Changing Environment.” In Bananas and Business: The United Fruit Company in Colombia. Page 75.