Volcafé saves on tax payments at the expense of developing countries
21 April 2004
Volcafé, the world’s second largest coffee trader and part of the bankrupt Erb Group with headquarters in Winterthur, used a postbox company on the Isle of Jersey in the English Channel to deceive tax authorities in coffee-producing countries and Switzerland for many years.
The various subsidiaries sell their coffee to Cofina; Cofina sells it to major customers or to Volcafé Winterthur (VOW). In the process, margins are manipulated to lower tax payments. As a result, subsidiaries in producer countries usually post only a small profit or a loss. A considerable part of the Volcafé Groups’ profits are made by Cofina in Jersey – tax-free.
In the subsidiaries of the Volcafe Group some people work as employees of their local company and, at the same time, double as phantom employees of Cofina.
The Berne Declaration calls on Volcafé to dismantle Cofina. All entities of the Volcafé Group should pay taxes, correctly, wherever their value is created. Corporations must realize that it is part of their corporate social responsibility to pay taxes.
Buyers of raw coffee, in the case of Volcafé companies like Nestlé, Starbucks, Migros, and Coop, should reject suppliers operating through tax havens and insist that the goods they buy are correctly taxed.