Banana giant Fyffes warned this week that the European Union’s new single tariff system for imports would add E40m to its duty costs during 2006.
The European Commission announced last month that a single tariff of E176/tonne would replace the existing licence-based quota regime from January 1.
Fyffes said: “It will take some time to assess the impact on the market of the elimination of quotas on banana volumes imported from Latin America.”
It also warned that banana prices could rise because of soaring shipping and fuel costs, which are expected to add E15m to Fyffes’ costs next year.
“These higher costs will need to be recovered from customers and suppliers,” said the company.
The grim outlook for next year overshadowed news that Fyffes was to pay a special dividend of 5.72c per share, equivalent to E20m in total.
The company said: “Market conditions have remained strong during the second half of the year. This has helped offset the significant cost inflation being experienced in the sector.”