Lactalis is facing accusations in France of under-paying staff profit bonuses, allegations the dairy giant disputes.
According to the new agency AFP, more than 500 current and former employees have filed a case with the Parquet National Financier (PNF), or the National Financial Prosecutor’s Office, accusing privately-owned Lactalis of misrepresenting its annual profits.
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Representing the employees, lawyer Renaud Portejoie was reported by AFP yesterday (25 November) as saying the affected workers could potentially number around 16,000, with losses to bonuses put in the “hundreds of millions” of euros.
The workers are also reportedly demanding more transparency in financial disclosures from Lactalis and the Besnier family, which owns the company through Belgium-registered BSA International.
While Lactalis is a privately-owned business led by chairman Emmanuel Besnier, it does periodically publicly disclose its financial accounts, usually on an annual basis, but has been criticised for not doing so in the past.
Lactalis acknowledged that disclosure fact when contacted by Just Food on the profit-sharing allegations: “Lactalis wishes to remind that the statutory accounts are filed with the Paris Economic Court,” a spokesperson for the dairy major said in a statement.
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By GlobalDataIn its most recent accounts disclosed in April for 2024, Lactalis said revenue exceeded €30bn ($34.1bn) for the first time, while net profit dropped 19% to €359m due to an unquantified and unspecified tax settlement late in the year with the French authorities.
“The fall in net income reflects the agreement reached with the French tax authorities in late 2024,” the company said at the time.
Lactalis previously revealed the tax settlement amount as €475m.
Lactalis disputes that the settlement had any link with employee profit bonuses, as the company spokesperson made reference in the statement to the dairy major and BSA International.
“The overall settlement reached with the tax authorities at the end of 2024 to close a dispute over the interpretation of the taxation of two international companies which are in no way subject to the employee profit-sharing scheme,” the spokesperson added.
Lactalis also makes a veiled reference to a group in France known as Justice for Our Bonuses, citied by the AFP as having a banner on its website claiming profit-sharing bonuses ‘have clearly been unfairly reduced’ over an unspecified number of years.
In response, Lactalis countered: “The association behind this action misleadingly claims to be conducting a ‘class action’ and has neither standing nor any mandate to act. Civil and criminal proceedings against this type of practice are currently underway.”
Contacted by Just Food on the worker claims around the profit-share reductions, a representative for the PNF said it had not been informed of the “complaint” and could therefore not comment.
Meanwhile, Lactalis issued a statement in December last year in relation to the tax settlement shared with Just Food today (26 November) which revolved around its “international financing operations”.
Those operations were set up 2006 but “closed several years ago” and were intended to foster international expansion.
The statement added: “The group fully cooperated with the French administration throughout the procedure, which was initiated in 2019.
“At the end of the procedure, a disagreement remained. Lactalis decided to follow the path of an overall settlement with the administration and to proceed with the payment of 475 million euros to put a definite end to the control procedures…..Lactalis firmly reaffirms that it had no unlawful intention.”
It emerged early in 2024 that Lactalis was under investigation for potential tax fraud.
A PNF spokesperson told Just Food at the time: “In 2018, I can confirm that the PNF opened an investigation into the charges of laundering aggravated tax fraud on suspicions of a reduction in its taxable profit by the Lactalis Group.
“In 2019, the PNF received a report from the Confédération paysanne and in 2022 mandatory tax denunciations from the tax authorities, which led to the extension of the investigation to cases of aggravated tax fraud.”
PNF said then that the “amount of duties likely to have been evaded over the period 2009-2020 is estimated at this stage at several hundred million euros”.
