The French company Lactalis, the world's leading dairy group, found itself under scrutiny on Tuesday as authorities conducted searches in France amid suspicions of aggravated tax fraud potentially linked to Luxembourg.

The National Financial Prosecutor's Office (PNF) spearheaded the investigation, focusing on alleged aggravated tax fraud and laundering of aggravated tax fraud, a judicial source said.

Searches were conducted by the National Brigade for the Repression of Tax Delinquency of the Judicial Police, alongside PNF magistrates, the same source added, confirming a report in the French newspaper Le Monde.

According to a source close to the case, targets of the search included Lactalis' headquarters in Laval, its offices in Paris, and the private mansion of CEO Emmanuel Besnier, also located in the French capital.

Investigators are examining the period from 2009 to 2020, with initial estimates suggesting potential tax evasion amounting to "several hundred million euros," according to the judicial source.

Le Monde reports that the investigation revolves around profit transfers to Lactalis subsidiaries in Belgium and Luxembourg, potentially aimed at reducing the group's tax liabilities in France.

Regarding the scale of the alleged fraud, the same source emphasised that the investigation aims to determine the veracity of the accusations and quantify any tax evasion.

RTL

Emmanuel Besnier, CEO of Lactalis. / © AFP

According to Le Monde, citing a source close to the investigation, the focus of the inquiries "at this stage" does not include Emmanuel Besnier's personal tax matters. However, the principal shareholder of the group, in tandem with his brother, Jean-Michel, and sister, Marie, remains pivotal due to the intricate intertwining of the family's holding entities with those of the company, the newspaper writes.

In response to queries from AFP, the group acknowledged the searches conducted at its premises on Tuesday, clarifying that they "were carried out in a calm manner and concern historical matters that have already been examined by the authorities."

The judicial source stated that the PNF initiated an investigation in 2018 into suspicions of aggravated tax fraud laundering associated with alleged tampering of taxable profits within the Lactalis group.

Subsequently, the scope expanded to include charges of aggravated tax fraud following reports from the Confédération paysanne in 2019 and mandatory tax disclosures from authorities in 2022, as explained by the judicial source.

The source emphasised that these searches had been meticulously planned for some time and were unrelated to current social tensions. Amidst rising discontent among farmers seeking improved remuneration, Lactalis faces criticism from milk producers. They accuse the group of unilaterally setting purchase prices for their products, allegedly disregarding the stipulations of the Egalim law, which mandates fair negotiations and cost considerations.