`Deoleo Requests Extension for $83M Tax Bill - Olive Oil Times
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Deoleo Requests Extension for $83M Tax Bill

By Chris Lindahl
Sep. 4, 2014 11:26 UTC
Summary Summary

Deoleo, a Spanish olive oil giant, has requested a defer­ment of a €63.3 mil­lion tax bill to the Italian gov­ern­ment due to unpaid cus­toms duties and taxes by its sub­sidiary Carapelli Firenze. The com­pa­ny’s finan­cial strug­gles have been fur­ther exac­er­bated by a net loss of €25.5 mil­lion in the first half of 2014, attrib­uted to weaker sales and the cost of refi­nanc­ing debt.

Spanish olive oil giant Deoleo has asked for a defer­ment of a €63.3 mil­lion ($83 mil­lion) tax bill to the Italian gov­ern­ment.

The debt comes form the actions of the conglomerate’s Carapelli Firenze sub­sidiary, which is swim­ming in unpaid cus­toms duties, tax bills, inter­est and penal­ties. The deci­sion is pend­ing in court.

Deoleo argues that the bag­gage of Carapeli Firenze should not impact the busi­ness actions of Deoleo as a whole, while the cus­toms office sees the depen­dent sub­sidiary as being the full respon­si­bil­ity of the cor­po­ra­tion.

Deoleo is the num­ber top seller of bot­tled olive oil world­wide, whose 15-brand port­fo­lio includes big names like Bertolli in the US and Italy, and the Spanish mar­ket leader Carbonell.

The news comes as another poten­tial blow to the already hurt­ing Deleo, which on August 28 announced net losses up to €25.5 mil­lion ($33.6 mil­lion) for the first half of 2014. The com­pany posted a profit of €4.2 mil­lion ($5.5 mil­lion) for the same period of 2013.

The com­pany said the losses were due to weaker sales which fell 6.4 per­cent to €356.9 mil­lion ($469 mil­lion) dur­ing the first half of 2014, cou­pled with the cost of refi­nanc­ing debt. Earlier this year, the com­pany com­pleted a refi­nanc­ing deal that cost it €23 mil­lion ($30.2 mil­lion) alone.

However, the com­pany stressed in a release that all is not doom and gloom. The group’s oper­at­ing profit increased 49.7 per­cent. The earn­ings before inter­est, taxes, depre­ci­a­tion, and amor­ti­za­tion was up to €41.2 mil­lion ($54.1 mil­lion) due to improved mar­gins in the key mar­kets of Spain, Italy and North America.

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