Unilever believes €11bn Dutch 'departure tax' is illegal
The boss of Unilever is confident a proposed Dutch "departure tax" will be ruled unlawful as the company unveiled better than expected third quarter sales.
The Marmite and Ben & Jerry’s owner is facing a major hurdle to move its legal base to London as the Dutch opposition GreenLeft (GroenLinks) party threatens to slap it with an €11bn levy.
The proposals are part of efforts to prevent large companies from leaving Holland as Unilever attempts to scrap its dual-headed Anglo-Dutch structure after 90 years in a move that could pave the way for breaking up the business.
Both Unilever’s Dutch and UK shareholders have voted overwhelmingly in favour of the proposed unification.
Alan Jope, chief executive of Unilever, said the company had sought the counsel of three Dutch legal firms and had been advised by two of them that the proposed legislation would contravene EU law.
“We've received strong legal advice that if the bill were enacted in its current form, with things like retroactive effect applied to Unilever's unification, it would infringe EU laws, the Dutch/UK tax treaties and other tax treaties in states in which Unilever shareholders reside,” Mr Jope said.
However, he added that the process to enact the merger would need to be completed before the end of the year for the unification to go ahead.
It came as Unilever beat analyst forecasts to post a 4.4pc rise in underlying sales to €12.9bn in the three months to the end of September. That was a marked rebound from the previous quarter when sales fell 0.3pc due to changes in consumer habits during the pandemic.
Unilever said the main driver of growth was a consumer shift to purchasing groceries and other products online, as e-commerce sales shot up by 76pc during the period.
The homecare division that includes Domestos bleach and Comfort fabric softener posted the fastest growth, up 6.7pc to €2.6bn.
Beauty and personal care rose 3.8pc, benefitting from strong sales of Dove soap and hand sanitiser, while food and refreshments division rose 3.7pc with bosses highlighting high demand for Hellmann's mayonnaise, Ben & Jerry's and Magnum ice creams.
However, sales of ice creams purchased outside the home cooled, particularly in Italy and Spain as travel restrictions dampened overseas tourist visitors to the countries.
Meanwhile, reduced demand for eating out as a result of localised lockdowns and rules saw Unilever’s food service business fall by 20pc in the quarter.
Shares rose 0.2pc to £47.12, valuing the company at £122bn - by far the biggest firm on the FTSE 100.
