Lactalis and its CEO were raided on Tuesday, February 6, as part of a massive tax fraud investigation. The operations were carried out by police officers from the French National Fiscal Offenses Repression Brigade (BNRDF) in at least three separate locations, namely at the dairy giant's headquarters in the town of Laval, at its offices in the Montparnasse Tower in Paris, and at CEO Emmanuel Besnier's private mansion in the French capital's 7th arrondissement.
Lactalis is the target of a preliminary investigation by the French National Financial Prosecutor's Office (PNF) into aggravated tax fraud and aggravated laundering of tax fraud. According to one court source, the company's tax organization enabled it to evade "several hundred million euros" in taxes. According to another source, "The schemes are highly sophisticated and ingenious." When contacted, Lactalis management stated that the raids "went smoothly," pointing out that they were "part of proceedings concerning old facts." According to our investigations, they date back to the period 2009-2020.
The PNF investigation was prompted in 2018 after revelations in the press. In rapid succession, Mediacités, Ebdo, Les Jours and Mediapart revealed that the world's leading dairy products group, founded in Laval in 1933, had been using several financial subsidiaries in Belgium and Luxembourg to allegedly artificially siphon off the group's profits to reduce its taxable income in France.
In 2020, the investigative journalism platform Disclose estimated the damage to French public finances at €220 million for the period 2013-2018 alone.
A parallel tax investigation
The PNF also received a complaint in 2019 from a farmers' union that has consistently criticized the multinational's practices for undermining the dairy industry's balance. The Confédération Paysanne accused the corporate group of "setting up a particularly complex intra-group rebilling system, as well as a fictitious share purchase scheme."
A source close to the investigation indicated that the investigations "do not at this stage concern Emmanuel Besnier's personal tax situation". But the group's reference shareholder, who controls the company with his brother, Jean-Michel, and sister, Marie, is nonetheless central to the case, due to the close interweaving between the family's holding companies and those of the company. "As the group is highly concentrated in the hands of a few shareholders, the investigations are also focusing on the head of the company," says a judicial source.
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