Interview with Luca Battaglio

Italy: Banana prices low, costs high

"We have always sold our product to traditional markets but today 80% of it goes to retailers. Of course we sell more in the north than in the south, but that is because there is a wider network of retailers there. Anyway our produce is available in all Italian regions and sales in the south are also growing," explains Luca Battaglio, president of Gruppo Battaglio, one of the leading banana importers in Italy.

Italy imports around 35 million cartons, i.e. 680 thousand tons, 8% of which is managed by Gruppo Battaglio. Cavendish bananas come from Ecuador, Costa Rica, Colombia and Dominican Republic, which also ships organic and Fairtrade produce. Transit time varies between 2 and 4 weeks.

The company has two warehouses in Turin and Rome - bananas that arrive at the Savona and Genova ports are transferred to the former, whereas those that arrive in Civitavecchia are destined to the latter. The produce is sold under the Battaglio brand for the Premium range as well as the Alba brand for the range with a more competitive price. Battaglio does not work with other multinational brands.

"Our fruit is all ripe, we do not trade green bananas. Our warehouses are equipped with ripening chambers, so the fruit can be stored and ripened to comply with client requirements."

"This year, we have imported around 55 thousand tons and we also sold 3 thousand tons of bananas in Argentina in cooperation with Cosur S.A. We are expecting to double the quantities sold to the Latin American country in 2016, while we should maintain our position in Italy."

Luca Battaglio (right), with Augusto Rita, President of Cosur, Argentinian company part of Gruppo Battaglio.

According to Luca Battaglio, 2015 has been characterised by problems connected with the devaluation of the Euro, which drove prices up. "Things were better during the first semester as supply was balanced and the market could absorb the costs. In the second semester, however, prices have been constantly low but costs have been higher."

"We are actually hoping for bad weather so as to reduce supply, because it is very difficult to manage imports and exports in a cautious and clever way. Unfortunately, there are various production peaks during the year, so bananas enter the market at low prices with no strategy whatsoever."

"In addition, this year the market is going through a peculiar phase, where multinationals are reorganising and the non-merger of Chiquita-Fyffes created some collateral effects. "I hoped the merger would occur, because Fyffes has a lot of experience in the production and distribution of bananas and tropical fruit, whereas the Brazilian group with which the agreement was made does not. I hope they can understand how to manage the market. In addition, Del Monte has not found its balance in Europe, which complicates the situation."

"We are definitely going towards a situation of natural selection where improvised operators will have increasingly less room to operate. This means inconsistent companies will find it difficult to remain on the market, while those that invest will manage to grow. Unfortunately, though, there are many new factors that slow this process down - there are people who think they can work as traders, then realise how difficult it is and disappear without paying what is due, thus creating difficulties for small producers. It is still too easy to start trading with low investments but people should be more careful, because they risk damaging the market."

To conclude, Luca Battaglio adds that "consistent with out interest in traditional markets and seen that we already have a warehouse in Rome, we will open a stall inside the Roma market (CAR) in the first half of 2016."

Battaglio SpA
Interporto SITO Nord
Tredicesima Strada, 1
10040 Rivalta di Torino (TO) - Italy
Tel.: +39 011 3494444

Author: Emanuela Fontana

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