Market Trends

Unilever Ponders Amsterdam or London for Ice Cream Unit Amid Dutch Economic Turbulence

(Bloomberg) – Unilever, a towering icon in the annals of Dutch commerce, stands at the crossroads of past glories and future uncertainties—a microcosm reflecting the evolving ethos of an economy historically celebrated for its openness in continental Europe.

In a strategic move that may foreshadow broader shifts in international business sentiment, the consumer goods colossus, which transferred its corporate domicile exclusively to the UK from its dual-headed structure four years prior, is deliberating the introduction of its €17 billion ice cream division to the stock markets of either Amsterdam or London. The choice hinges critically upon the allure of the Dutch business framework, a point underscored by Chief Executive Officer Hein Schumacher in his comments on the Buitenhof TV program. Yet, shadows of doubt loom over its attractiveness.

"We have encountered a few unexpected developments in recent times," Schumacher remarked, emphasizing the paramount value of a predictable government and consistent regulation.

Unrest has been brewing in the corporate community in response to sweeping legislative proposals. Recent actions intend to levy taxation on share repurchase schemes and to curb tax incentives pivotal to expatriates. Furthermore, a bill that proposes constraints on the influx of foreign students has triggered warning bells among industries that thrive on the global workforce.

The prevailing socio-political tenor resonates strongly with the sentiment swaying Dutch electorates since 2022. Migrant numbers swelled by 60% that year, priming the public discourse for a seismic pivot—an exemplified reality in the electoral triumph of Geert Wilders, a far-right ideologue, last November. Despite Wilders renouncing his aspirations for prime ministership, his influence endures; all prospective coalition parties explicitly adopted anti-immigrant stances during their campaigns.

The widening chasm in the Netherlands, a fertile ground for multinational powerhouse firms like ASML, Boskalis, and NXP Semiconductors NV, signifies a burgeoning peril that besets corporations across Europe: the intensifying wave of populist fervor could potentially disrupt their access to indispensable international labor resources.

"What I gather from conversations with business frontrunners operating major local ventures is the growing apprehension that talent acquisition—that attractive force for global professionals—may be significantly hindered," shared Marjella Lecourt-Alma, the chief executive officer of Datamaran, a firm specializing in software analytics dedicated to ESG risks.

Amidst ongoing deliberations to forge a coalition, the trajectory of the European Union's fifth-largest economy teeters on an ambiguous hinge. Vocal disapproval from the industry's titans echoes through the corridors of power, with explicit warnings of potential relocations or expansions leaning towards foreign markets over domestic ones.

Peter Berdowski, the figurehead of Boskalis NV, a prime dredging and maritime service provider, articulated to De Telegraaf the company's contemplations to orchestrate a move of its central operations outside the Netherlands. Echoing this sentiment, a staggering 16% of Dutch organizations divulge plans to transplant parts of their undertakings abroad over the forthcoming biennial period, a statistic that escalates to around 33% when considering predominantly global corporations, as per a 2023 study commissioned by the Economic Affairs Ministry.

The bleak forecast emanates from corporate concerns regarding impending limitations on international recruitment, as well as grievances about existing regulations that entangle routine commercial operations. A notable voicing from Kaan Terzioglu, CEO of Veon Ltd, an Amsterdam-listed telecommunications entity, highlights the stringent visa policies. Terzioglu lamented the obstructions faced in mobilizing employees from nations such as Pakistan and Bangladesh for essential corporate assemblies.

In the technology realm, unease pervades prominently. ASML, a semiconductor behemoth with a market valuation of €360 billion, stands as a linchpin to Dutch economic well-being—one so vital that outgoing Prime Minister Mark Rutte established a task force to circumvent its expansion abroad. However, the company, where foreigners make up over 40% of its domestic workforce and more than half of NXP's novel recruits, could be severely impacted by prohibitive policies against non-Dutch nationals. DataSnipper, another Amsterdam-headquartered venture valued at $1 billion and specializing in AI-driven auditing software, mirrors this international composition with about 70% of its personnel being expatriates.

If the Netherlands hardens its stance, hampering the procurement of adept professionals, there lurks a threat of companies chasing the talent exodus, as they seek more welcoming climes. Peter Wennink, ASML's CEO, echoed this sentiment at a January press briefing: "If the Netherlands shuts its doors, refusing immigrants or foreign students, then the repercussions must be recognized. We are global; our movements will align with the need to sustain and augment the company and cater to client needs."

This emerging aversion to immigration and business does not come as an abrupt revelation; it has been percolating beneath the surface for quite some time. The public's disdain towards large corporations arguably gained momentum during the financial crisis, as Dutch taxpayers felt the sting of multibillion-euro bank bailouts.

Mark Rutte, premier and former Unilever HR manager, strived unwaveringly to maintain the appeal of the Netherlands for corporate investments. Despite Rutte's efforts, including encouraging CEOs to sway public perceptions through media appearances, his ability to fend off bank tax hikes, share repurchase taxation, and a multinationals-targeting dividend tax faltered. Similarly, Pieter Omtzigt's legislative endeavors trimmed beneficial tax schemes for expatriates.

A poignant reflection of companies' responses to the Netherlands' uninviting tax measures came in 2021, with Shell Plc relocating its head office to London after being confronted with dividend taxation and a legal directive to accelerate emission reductions.

During a heated parliamentary debate, Micky Adriaansens, the Dutch minister for economic affairs, voiced her trepidation over the national perception globally. She noted business leaders' grievances, characterizing the variable, indiscriminate policies as 'incredibly damaging' to investment prospects in the Netherlands.

Amidst these tensions, the Dutch finance ministry is composing alternate propositions to address the clouded future of banking and share buyback levies and diminishing expatriate tax benefits. These proposals, eagerly awaited, are expected to be unveiled to the parliament soon, according to informed sources.

The longing for a semblance of certainty and stability on the horizon persists as the business elite anxiously await a clearer vision of the nation’s forthcoming policies.

"In a world where populist governments may rise, it’s not their existence that unnerves companies, but rather the lack of foresight into governmental actions," stated Corné van Zeijl, a strategist with Cardano Asset Management.

Siphoned from the depths of administrative expertise, Diederik Baazil lent his assistance in this report's construction.

View in-depth coverage of these developments here: The Dutch Question Centuries of Openness as They Go to the Polls

For more insights: Euronext Warns Netherlands Risks Losing Allure for Global Firms

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