Fresh DEL Monte Produce Inc.

“Consolidation of retailers, wholesalers and distributors in the food industry may result in downward pressure on sales prices.”

“The food industry in the United States and in many international markets has significantly consolidated in the past twenty years and continues to consolidate. For example, in October 2022, Kroger and Albertsons entered into an agreement to merge and in August 2023 Aldi announced its agreement to acquire Winn-Dixie and Harveys Supermarket. Based on their increased size and buying leverage as a result of consolidation, these entities (i) can exert significant downward pricing pressure on marketers and/or distributors, such as us, which inhibits our ability to adequately respond to inflationary changes, (ii) can impose additional costs on us that are the type typically borne by the retailer, wholesaler or distributor and (iii) have the ability to launch private label food products that compete with us. If we are unable to successfully manage these relationships, our financial results may be materially and adversely affected.”

“Sales prices for bananas, pineapples and other fresh produce are difficult to predict. It is possible that sales prices for bananas and pineapples will decline in the future, and sales prices for other fresh produce may also decline. In recent years, there has been increasing consolidation among food retailers, wholesalers and distributors. We believe the increasing consolidation among food retailers may contribute to further downward pressure on our sales prices. In the event of a decline in sales prices or sales volumes, we could realize significant losses, experience liquidity problems and suffer a weakening in our financial condition. A significant portion of our costs are fixed, so that fluctuations in the sales prices have an immediate impact on our profitability. Our profitability is also affected by our production costs, which may increase due to factors beyond our control.”