GLOBAL FRUIT PRICES FALL NEW MARKETPLACE HAS GROWERS SCRAMBLING.

Byline: Evan Pondel Staff Writer

For fruit growers, a rotten economy isn't the only worry cropping up.

Amid the groves and jungles of the world, political turmoil and competition has changed the landscape for U.S.-based fruit companies. And with a turbulent economy, some are bracing for tougher times ahead.

``One of the biggest factors is the increase of global competition with all the other fruits that used to be just seasonal. Now, there are so much more produce choices available,'' said Claire Smith, a spokeswoman for Sherman Oaks-based Sunkist Growers Inc.

In the last five years, the produce department at supermarkets across the U.S. has become more diversified. However, instead of offering a wider variety of fruit and vegetables, the exporters have changed, Smith said.

Sunkist, a cooperative of growers in California, Arizona and Texas, is enduring a squeeze in sales as a result of heightened competition coming from countries that grow oranges and lemons, coupled with consolidation among buyers.

``But because of the competition and consolidation ... we are restructuring,'' Smith said.

Sunkist's antidote to counteract a dearth in fruit sales: Texas grapefruit.

The cooperative recently hatched a deal with Texas grapefruit growers to broaden the group's market breadth. Still, now that oranges are coming from Chile and Spain, growing citrus fruits in Texas isn't the only option Sunkist is exploring.

Smith said it's possible that Sunkist may look outside the U.S. for opportunities. The exorbitant costs associated with the high standards of growing fruit in the U.S. also increases the appeal of looking to other countries for business.

Not so for Chiquita, though.

The Cincinnati, Ohio-based company filed a prearranged plan for Chapter 11 bankruptcy protection Wednesday following a morass of political turmoil in Europe, said George Dahlman, an analyst with U.S. Bancorp Piper Jaffray in Minnesota.

As the biggest banana player in Europe, Dahlman said, the company ran into problems with importing to and from other countries. A trade dispute in Europe and a world-wide glut in bananas incited the company earlier in November to reach an agreement with bondholders on a restructuring plan that would reduce debt and accrued interest by $700 million.

``So as a whole, the industry really hasn't been affected by the economic downturn. Bananas are a basic staple,'' Dahlman said.

Chiquita Brands International, a holding company, said its subsidiaries would continue to produce and distribute bananas without interruption during the process.

As Chiquita alters its business plan to retain its global position, Dahlman said the banana seller's woes have no implications for the competition.

Dole Food Co., the largest producer and marketer of fresh fruit, reported a third-quarter net loss of $94.8 million, or $1.68 a share, compared with a loss of $7.4 million, or 13 cents a share, in the same period a year ago.

The Westlake Village based-company said it didn't feel commenting on Chiquita's bankruptcy protection and the industry's response to the economic downturn was appropriate.

``Every business goes through cycles,'' said Freya Maneki, Dole spokeswoman.

Chiquita shares were up 5 cents to 48 cents, while Dole Food Co. rose 10 cents to $23.27 at Wednesday's close.

CAPTION(S):

box, chart, 2 graphs

Box:

CHIQUITA SLIPS INTO BANKRUPTCY

To reduce the company's debt by about $700 million. Chiquita Brands International Inc. filed for Chapter 11 bankruptcy protection on Wednesday.

Graph:

(1) Net income/loss

(2) Stock performance

Chart:

Market share for U.S. imports and exports of bananas

SOURCES: Hoover's Online: Piers.com, Yahoo.com; Quote.com; Commodity Systems Inc.

Associated Press