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or the Canelos growers) selling costs, freight costs, product
costs, and any Mexican-imputed business taxes assessed on sales
of the product. Included in selling costs was a commission of 40
cents per box paid to petitioner. Standard Fruit further agreed
to share in 25 percent of the losses and to advance the working
capital needs of the venture up to $2.5 million.
In July 1982, petitioner and Produce America, Inc. (Produce
America), a subsidiary of Dole, entered into a 5-year agreement
(1982 contract) entitled "Sales Subagency Agreement". In the
1982 contract, Produce America agreed to use its marketing
resources to market more effectively in the United States,
Canada, and Europe tomatoes, cucumbers, bell peppers, squash, and
eggplant grown by the Canelos growers in various areas in Mexico.
It received a commission of 50 percent of the total profit of
each product. Profit was computed after subtracting from total
sales revenue selling costs, freight costs, product costs,
duties, and any Mexican-imputed business taxes assessed on sales
of the product. Included in selling costs was a commission of 40
cents per box paid to petitioner. Produce America further agreed
to share in 50 percent of the losses and to advance the working
capital needs of the venture up to an amount mutually agreed upon
by the parties.
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