Lactalis recently surpassed €30 billion ($34.1 billion) in revenues for the first time, yet the growth rate has waned amidst an “unstable geopolitical and economic climate.” This insight comes from the world’s leading dairy company, which recorded a 19% decline in net profit for 2024, amounting to €359 million. This drop is attributed to an undisclosed tax settlement with French authorities that occurred late in the year.
In early 2024, Lactalis reportedly faced scrutiny from the Parquet National Financier (PNF), or the National Financial Prosecutor’s Office, due to allegations of tax fraud dating back to 2018. According to local news outlet Le Monde, the investigation began after revelations surfaced in various French media, including Mediacités, Ebdo, Les Jours, and Mediapart.
These reports indicated that Lactalis might have employed financial subsidiaries in Belgium and Luxembourg to allegedly divert profits, thereby minimizing its taxable income in France. In a financial performance statement released on LinkedIn on April 16, Lactalis briefly noted, “The fall in net income reflects the agreement reached with the French tax authorities in late 2024.”
Despite these challenges, the company’s revenues rose by 2.8% to €30.3 billion; however, this reflects a slowdown compared to the 4.3% growth experienced in 2023. Operating income increased by 4.3%, but Lactalis did not disclose a specific figure. Additionally, net income decreased from €428 million in the previous year.
Lactalis, headquartered in Laval, Pays-de-la-Loire, reported in its 2023 findings that profits remained a concern despite an 11% increase. The year witnessed a shift in consumer purchasing habits, highlighted by diminished sales volumes and a growing preference for private labels.
The company’s commentary surrounding its 2024 performance lacked detail, stating only that it “maintained its growth trajectory in an unstable geopolitical and economic climate.” However, profit margins decreased as well, landing at 1.2% compared to 1.45% in 2023 and 1.36% in 2022.
Chairman Emmanuel Besnier remarked on Lactalis’ enduring expertise, saying, “For over nine decades, Lactalis has perfected its expertise in manufacturing dairy products year after year and developed a model that brings it stability and performance. Today, we keep growing and creating value through our investments, as well as our ability to innovate, propose sustainable practices and support the development of partners around the world.”
The dairy giant reported investing over €1 billion in its manufacturing facilities last year. This included enhancements at its Larceveau creamery for Ossau-Iraty cheese and the establishment of new production and packaging lines at facilities in Certosa (Italy), Tulare (US), and Bendigo (Australia).
In conclusion, as trends in the food and beverage industry continue to evolve, Lactalis demonstrates resilience, seeking to adapt and innovate within the changing landscape of the food and drink business.
