Honduras controversy won't stop Fyffes' Japanese takeover

The Irish fruit firm has been dealing with allegations of exploitation in Central America...

Honduras controversy won't stop Fyffes' Japanese takeover

A bunch of Fyffes bananas pictured outside the company's head office in Dublin. Picture by Brian Lawless PA Wire/PA Images

The acquisition of Fyffes by Japan's Sumitomo Corporation is set to be approved by the High Court today, as the Irish tropical fruits firm gears up to respond to allegations that it has exploited workers in Central America.

Work on the €751m takeover has been taking place under a cloud of controversy for the Dublin-headquartered producer of melons, bananas and more.

In late 2016, a group of Honduran melon plantation labourers claimed that they had been threatened with "dismissal and destitution" for trying to form a union. The workers – the vast majority of whom are women – called on European and US consumers to boycott Fyffes products at the time.

As a member of the Ethical Trading Initiative (ETI), Fyffes was then instructed to deliver an action plan on working conditions to the ETI by February 3rd.

It subsequently exercised its membership right to present its case to a disciplinary committee drawn from the ETI board. An ETI spokesperson told The Irish Times:

"We expect the meeting to be sooner rather than later, but we are not in a position to say when, as that depends on getting everyone around the table. It’s been a long, drawn-out process as it is.”

Meanwhile, its acquisition has already been cleared by Fyffes shareholders and European competition authorities.

Those shareholders will receive a final 2 cent dividend on 2016 earnings, comprising part of Sumito's €2.25 per share offer for the company.

Fyffes shares will then be cancelled on Dublin and London stock exchanges on Monday, bringing three-and-a-half decades as a listed company to an end.

Demonstrations took place outside that shareholder meeting in Dublin last month, led by UK non-profit Banana Link and the GMB trade union. It is alleged that there has been a failure to pay minimum wages and social insurance at the Suragroh subsidiary in Honduras, that workers were allegedly exposed to hazardous agrochemicals, and allegedly sacked for becoming union members.

A Fyffes spokesman said:

"Fyffes fully respects the rights of its employees, but as the ETI process is ongoing, we don't feel it's appropriate to comment."