To our shareholders,


This past year was a difficult year for Chiquita. Increases in operating costs had the largest effect on our finances this year. There were many challenges but also many accomplishments in the creation of new products. Although we have had a few bumps in the road, we have come up with solutions to these challenges that will have a lasting effect on the company.


Here’s an overview of our performance for 2006:


Although these results aren’t as positive as we had hoped, their causes can be pinpointed and explained. Industry costs increased due to increased costs in fuel, packaging supplies, and shipping costs. Tariffs in the European Union banana market, along with an E.coli threat in lettuce and leafy greens, also caused increases in our operating costs this year. On a positive note, our acquisition of Fresh Express caused net sales to grow this year.


Chiquita’s first challenge was dealing with increases in tariff costs. The European Commission imposed a tariff of 176 euros per metric ton of bananas imported from Latin America. This meant the tariff increased by 75 euros per metric ton from last year. Many Latin American countries have objected to the tariff increase, calling it illegal. In fact, Ecuador is challenging the tariff and has had its request for an arbitration panel approved as of March 2007. Chiquita is optimistic that Ecuador’s appeal will decrease tariff rates in Europe.


Additionally, the fresh spinach market faced an E.coli scare that shook the confidence of consumers. After an extensive investigation of our products, the U.S. Food and Drug Administration found no trace of E.coli. Although our fresh spinach and leafy greens did not have E.coli, we believe the negative attention experienced nationwide by consumers caused reduced consumption in these products. Chiquita invested $12 million in research to ensure our products were safe for consumers. We believe that Chiquita’s genuine concern for the health of our customers will help to earn back the confidence lost during this past year.


Transportation costs, such as the cost of fuel and ship charters, along with higher prices of paper and resin used in production, also contributed to the overall increase in operating costs.


What we can be proud of this past year is the acquisition of Fresh Express, the leader in retail packaged salad. Chiquita is the first to market ready-to-eat salads, providing customers with a fresh and healthy product that is conveniently prepared. Two of our unique salad blends, “Sweet Butter” and “5 Lettuce Mix,” debuted as the top two new items introduced in U.S. supermarkets across all categories. New products from brands such as Pepsi, Frito-Lay and Kraft were among our competitors. The addition of this innovative and successful line of salads caused our sales to increase to a record $4.5 billion in 2006.


Other products we introduced this year include “Chiquita Minis” mini bananas, “Chiquita Apple Bites” sliced apples, and “Chiquita Just Fruit in a Bottle” smoothies. We are proud to say that our new apple bites have become the number-one brand of sliced apples in the United States. “Chiquita Minis” have tested successfully in the Finland market, and “Chiquita Just Fruit in a Bottle” excelled in its introduction to the European market.


Through both the triumphs and the setbacks, Chiquita looks forward to a promising future. During the next five years, our goal is to more than double profitability. To achieve this goal, we will focus on two objectives: creating innovative products and maintaining efficiency in our operations.


By continuing to create innovative products, Chiquita will meet the growing consumer demand for ready-to-eat fresh foods. The challenges faced in operations this year allowed us to work out some of the kinks and improve our production processes. As a result, packaging and transportation of our products will be more efficient and cost-effective in the future.


We are constantly re-evaluating our progress and making improvement for the future. We are determined to maintain product quality and customer service by continuing to excel in our market. Through innovation and efficient production, we are confident that we will increase profits and raise consumer satisfaction in the years to come. Finally, we would like to thank both our dedicated employees and loyal customers for their commitment and support. Without your help, we would never reach these goals.





Fernando Aguirre

Chairman and Chief Executive Officer

April 12, 2007