Adobe Stock
Leading global olive oil bottler Deoleo reported a €54.5M (US$59.1M) loss in 2024 despite a 19% increase in sales revenue to €996M (US$1.08bn) mainly due to ongoing legal issues, Olive Oil Times wrote.
As well as its dispute with Italian customs over back taxes and penalties, the company also faced challenges in sourcing olive oil and declining prices, the 3 March report said.
However, the company had achieved positive financial indicators and was considering strategies to minimise the impact of potential tariffs, particularly in the US market, Olive Oil Times wrote.
Officials cited the company’s ongoing legal issues, including litigation facing Italian subsidiary Carapelli Firenze, as the main reason for its losses, the report said.
The dispute stemmed from a legal move used by Carapelli to import olive oil through a Swiss subsidiary, with the oil later bottled in Italy and re-exported outside the European Union (EU), Olive Oil Times wrote.
Deoleo said it was its understanding that this practice fell within a European customs law exemption, allowing it to avoid paying tariffs on olive oil imports.
However, Italian customs officials opened a case against Carapelli in 2014.
Based on two unfavourable court rulings, the company was quoted as saying it would allocate €64.7M (US$70.1) for back taxes and penalties if the rulings were upheld.
At the time of the report, Deoleo was waiting for Italy’s Supreme Court to decide if it was going to take up the case.
Although Switzerland is not an EU member state, it has a free trade agreement with the EU.
Deoleo financial director Enrique Weickert was quoted as saying Italian customs authorities had requested the first payment in February.
“The result for the year is very negative, but 90% of this result is related to the provision we have made for the litigation in Italy,” he told reporters on a conference call, adding that the company had “very solid arguments” if the Supreme Court decided to hear the case.
Apart from the legal issues, Weickert described 2024 as “difficult and complicated”.
The company had struggled to source olive oil at the start of the year as olive oil stocks fell close to zero after a second consecutive poor harvest across Spain and the Mediterranean, Olive Oil Times wrote.
In the second half of the year, the company was impacted by steadily declining prices as many countries in the region prepared for harvest rebounds, according to the report.
Weickert said olive oil consumption had fallen by 8% in Spain and the USA, and 2% in Italy in 2024.
However, the company said there had been a 10% increase in earnings before interests, taxes, depreciation and amortisation (EBITDA), which reached €33.4M (US$36.2M).