Luxemburg/Italy: Campari Group Faces EUR 1.2 Billion Tax Evasion Probe

The Campari Group is under investigation for allegedly evading EUR 1.2 billion in taxes. The investigation focuses on the group's Luxembourg-based parent company, Lagfin, rather than directly on Davide Campari-Milano NV. The Italian Revenue Agency has raised issues related to the relocation of the company's headquarters abroad, and the Milan prosecutor's office is exploring possible false statements. This situation has caused significant scrutiny and a drop in Campari's stock market value.

The investigators are said to have uncovered undeclared revenues of EUR 5 billion. An applicable exit tax was reportedly not paid. Lagfin, however, stated in a statement that it has always met its tax obligations with the utmost care.

The Campari Group itself clarified that neither it nor any of its subsidiaries are under investigation. This stance, coordinated with lawyer Nerio Diodà, aims to manage the media scrutiny and mitigate the stock market decline (-3.6%). While technically sound, Campari's defense masks a crucial detail: the Milan prosecutor's investigation into a suspected 1.2 billion euro tax evasion targets not the holding company itself, but its parent company, Lagfin, a Luxembourg-based entity that controls the Dutch NV.

The investigation also involves the Garavoglia siblings, who control the Luxembourg-based holding company Lagfin through trusts. Luca and Alessandra Garavoglia are prominent figures in the Campari Group. They inherited their shares from their parents, Domenico and Rosa Anna Magno Garavoglia, making them significant stakeholders in the company.

Luca Garavoglia has been the chairman of the Campari Group since 1994 and has been instrumental in its expansion and acquisition strategies. As of recent estimates, his net worth is around USD 5.1 billion. Alessandra Garavoglia serves as a non-executive director on the board of the Campari Group.

The operation under investigation, initiated in 2018, included the incorporation and merger of the Italian company Alicros into Lagfin and the establishment of Lagfin Italian Branch. While Campari asserts the operation's compliance, it has not provided detailed explanations. This operation closely mirrors the strategy used by Exor, the Agnelli-Elkann family's holding company, which also came under scrutiny by the Milan prosecutor's office.

Campari's net sales in 2023 amounted to EUR 2.918 billion, an increase of 8.2% compared to the previous year. Earnings before interest and taxes (EBIT) were EUR  618.7 million.

Share this article: