Food giant Bartter earns $1.5bn but pays no tax

PRIVATE companies want exemption from the corporate tax list.

Three Baiada companies are exempted from tax rules.

PRIVATELY owned food giant Bartter, which owns the famous Steggles brand and generates almost $1.5 billion a year in revenue, paid no tax this year despite declaring a profit and paying a dividend of almost $30 million to its owners, the Baiada and Camilleri families.

The revelation, contained in a financial report filed by Bartter, comes as some of Australia’s biggest privately owned businesses are urging the Abbott government to exempt their companies from a list showing how much tax the country’s top corporates pay, to be published on the tax office website under a policy brought in by the previous Labor regime.

Financial information about other parts of the Baiada business empire remain private by rules introduced by the Keating government in 1995 that exempted some large companies from filing annual reports with the corporate regulator.

However, an insight into the business comes from Bartter Holdings, which has filed financial reports with the Australian Securities & Investments Commission since it was acquired by Baiada in 2009.

Companies that meet two of three tests — revenue of more than $25m a year, assets of $12.5m or more or 50 or more employees — are normally required to file ­accounts.

Three Baiada companies are among almost 1500, including the Pratt family’s Visy empire, Lindsay Fox’s Linfox and Kerry Stokes’ Australian Capital Equity, that are “grandfathered” an exemption from the rules.

The Labor Party promised to abolish grandfathering — a move long desired by senior Treasury officials — before the 2007 election, but quietly abandoned the policy in 2012.

Accounts for the year to June 28, filed last month, show that Bartter had revenue of $1.48bn and declared a profit before tax of $9.74m. During the year, it also paid dividends of $29.4m to its shareholders, companies ultimately owned by members of the ­Baiada and Camilleri families. However, income tax payable by the company is recorded in the accounts as zero. This is because pre-tax income is exactly balanced out by deductions, mostly due to benefits claimed for the difference in the way stock and lease values are worked out for tax purposes.

In the previous year, Bartter declared a profit before tax of $38.9m, on $1.35bn in revenue, and paid $9.36m in tax.

Tim Kennedy, the national secretary of the National Union of Workers, which is locked in a long-running dispute with Baiada over the use of subcontract workers, hit out at the company claiming it used “loopholes to unfairly limit the tax they contribute to our society”.

“Baiada, in avoiding their tax obligations, contribute to growing inequality in Australia,” he said. A Baiada spokeswoman declined to comment on Bartter’s accounts.