Unilever Scraps Plan to Leave London

Anglo-Dutch giant Unilever, known for such family favourites as Marmite, Dove and Ben & Jerry’s, has scrapped its planned HQ move from London to Rotterdam after a major shareholder revolt. Following a very public tug-of-war between the British and Dutch governments, the £124 billion firm initially decided on the move after receiving promises of more favourable tax and regulatory treatment from the Netherlands. Not Brexit, despite the furore from Remainers at the time…

Steve Hawkes hits the nail on the head when he writes “Unilever is a prime example of the craziness of the Referendum war that still rages. This time Remain has been caught out – and some. The Dutch move was only ever about tax breaks but Remain jumped all over the story for the cause. Now they have to spend a day eating humble pie…”

Investors were up in arms over the prospect of leaving London, with particular unhappiness at the possibility of no longer being listed on the FTSE 100. Despite Remainers’ best attempts to do the UK’s prospects down, the reality is that the gravitational pull of London is simply too strong. Paris, Frankfurt and the rest will always be distant runners-up at best…

Memos Reveal Polman and Unilever at Centre of Tax Scandal Engulfing Rutte

Significant developments in the Unilever tax scandal in Holland overnight. Bombshell documents released to the press name Unilever as the primary cause of the Dutch government’s decision to abolish its dividend tax, and confirm Unilever’s Brexit-hating boss Paul Polman was involved in the discussions. The secret sweetheart deal was seen as “decisive” in Unilever’s decision to move its listing from London to Holland. This is causing a major problem for Mark Rutte – he claimed he was not aware of these memos, but their contents show he very much was and suggest Unilever managed to change Dutch government policy, at huge cost to the Dutch treasury, without any democratic legitimacy. Polman needs 75% of Unilever shareholders to approve the move to Holland. These smoking gun memos will put his ability to reach that threshold in further doubt…

Unilever Faces Shareholder Revolt Amid Dutch Tax Scandal

Guido has previously reported on how Unilever’s fanatical Remainer boss Paul Polman is threatening to drop the company’s London listing. Polman’s plan has been described by City figures as a “nasty campaign” motivated by his opposition to Brexit. There is another reason. A major scandal is brewing in Holland, where the Dutch government has abolished its dividend tax as part of its efforts to lure Unilever over. Polman and Mark Rutte are facing accusations they cooked up a sweetheart tax deal which the Dutch government then attempted to cover up, at huge cost to the Dutch treasury. It has since been forced to admit its private memos on the arrangement made “politically sensitive” references to “another country”, i.e. on Brexit. Unilever shareholders were already unhappy with Polman’s attempts to switch to an exclusive Dutch listing. Jeremy Warner explains why they are going to lose out:

Stripped of its UK domicile, Unilever will no longer be eligible for inclusion in FTSE indices, meaning that investors who track those indices might be forced to sell at possibly disadvantageous prices. To proceed, Unilever needs the approval of 75pc of its plc shareholders. Index holders, some of whom have already spoken out against the plan, own around a fifth of the capital, so it’s by no means in the bag, even with the help of a sneaky little $6bn (£4.3bn) buyback, announced last week. Unilever has a fight on its hands… If I were Paul Polman, Unilever’s Brexit-hating chief executive, I’d be worried. There’s a high chance of his swansong going up in smoke.

The two reasons why Unilever wants to move to Holland are the abolition of the dividend tax – so much for the level playing field – and protective rules which will make takeovers (like the Kraft attempt last year) much harder. Which means Rutte, in his regular pops at Britain over Brexit, has been criticising the UK for not accepting the freedoms of single market but attracting companies to Holland by restricting flow of capital. Will Unilever’s shareholders succeed in stopping the move?

Unilever U-Turn on Threat to Drop London Listing For Now

Last week saw reports that Unilever is considering dropping its London listing and reporting only to the Amsterdam stock exchange (it is currently listed with both). The story was widely interpreted as a threat from Unilever’s ultra-Remainer CEO Paul Polman, who has been using his position to undermine Brexit at every turn. Well, some good news from Unilever’s investor event this morning: “the Board intends to maintain listings in the Netherlands, United Kingdom and United States”. And Polman is on his way out of the company. Maintaining their London listing and ignoring the whinging of their Remainiac CEO is a sensible decision by the Unilever board, they would do well to drop his naff campaign once and for all…

Unilever’s Remain Ultra CEO Threatens to Drop London Listing

Pro-Remain papers and Vince Cable are jumping on reports yesterday that Unilever is considering dropping its London listing and reporting only to the Amsterdam stock exchange (it is currently listed with both). It’s the latest move from Unilever’s Remain ultra CEO Paul Polman, whose previous efforts to fight Brexit include ordering his staff to vote Remain, accusing the Leave campaign of lying, demanding Theresa May seeks an even longer transition, claiming Brexit would cause job losses and even threatening 50% tariffs on ice cream. Remember, for all Unilever’s Europhilia and pro-Remain campaigning, that does not extend to their profits remaining in high-tax EU states. They book their profits in Switzerland

City figures say this is part of a wider campaign by Polman. One says:

“It looks like there’s a nasty campaign by Remainer-in-Chief and Unilever CEO Paul Polman to switch the company to exclusive Dutch listing. He is putting his politics before rational economics. This won’t go down well with shareholders, even after Unilever stitched up a cosy tax arrangement in the most recent Dutch coalition deal.”

Worth noting that none of Unilever’s 7,500 UK jobs would be affected if they drop their London listing. Still, gets a good anti-Brexit headline…

Marmite Owner Unilever Books Profits in Switzerland

unilever-switzerlan

Unilever has a discreet – though huge – HQ in Schaffhausen, Switzerland (outside of the EU), through which it books purchases and sales to reduce tax liability. If you didn’t already know it was there you would be hard pressed to notice the blue ‘U’ logo on an upper level window…

Guido’s co-conspirators in Switzerland say purchases are made through the Schaffhausen entity and they are fairly certain Unilever’s intellectual property brand assets take advantage of the friendly tax regime. Could it be that Unilever’s companies across the EU pay heavy royalty fees to their Swiss entity, so as much profitability as possible rolls up there and gets taxed at super-low rates. Schaffhausen is well known in Switzerland (like Zug & Geneva) for offering special sweetheart corporate tax deals that are negotiated individually. Unilever’s €urophilia and pro-Remain campaigning does not extend to its profits remaining in high-tax EU states…

UPDATE: A well informed gnome tells Guido:

The point of Unilever running the purchases through Switzerland, means that the Swiss entity then owns the raw materials (and also the finished goods – the legal/finance people will ensure this).  Then, the individual Unilever country offices around Europe have to buy these materials from Unilever in Switzerland – at hefty price, no doubt including the royalty/IP charges for the Unilever recipes which will also be owned by Switzerland.  This has the effect of moving money to Switzerland from the UK/Germany/wherever else.

Marmite is 100% British Sourced and Produced

marmite-britain

The whole world’s Marmite supply is produced in Burton from yeast extract by-products of brewing. Burton has for over a century been the manufacturing base of Marmite because of the town’s beer heritage, there were once 30 breweries in the surrounding area. The basic ingredient of the spread is yeast sludge, a waste product left over from brewing beer. Nowadays the raw materials come from across the UK.

Unilever produces 6,000 tons of Marmite every year – around 50 million jars – entirely in the UK. The fall in the pound can therefore not justify Unilever’s reported demand for a 10% price increase for an entirely UK sourced product. Unilever are just using Brexit as a pretext for profiteering…

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