Italy seizes $51 million from Rhenus Group unit in labour supply probe

By Emilio Parodi

MILAN (Reuters) -Italian tax police have seized 43.5 million euros ($51 million) from the local unit of German logistics group Rhenus as part of a probe into alleged tax fraud and illegal labour practices, prosecutors' documents showed on Tuesday.

Milan prosecutors have launched a series of formal investigations into Italy's logistics and delivery firms, targeting the local units of major companies including FedEx, Amazon, GLS and DHL.

In the latest probe, they accuse Rhenus Logistics Spa of issuing false invoices and bypassing labour and tax laws to avoid tax and social security payments, according to a 199-page decree reviewed by Reuters.

The allegations cover the period from 2019 to 2024. The prosecutors have not yet requested an indictment.

Rhenus Logistics Spa did not immediately respond to A Reuters request for comment.

Rhenus Logistics Spa is part of Rhenus Group, one of Europe's leading logistics services providers with annual revenues of 8.2 billion euros. It employs 41,000 workers at 1,330 offices worldwide.

The prosecutors allege Rhenus Logistics Spa, via intermediaries, used "fake procurement contracts for the provision of services" with cooperatives and limited liability companies providing cheap labour, and subsequently filed false tax declarations.

This business model, they wrote, has been in use in the sector for years, if not decades, in Italy and "facilitates the exploitation of workers and results in unfair competition."

Italian authorities have scrutinised over a dozen delivery and logistics groups over their labour practices in recent years, issuing seizure orders totalling more than 650 million euros since 2021, including the latest confiscations.

Based on data from the National Social Security Institute, over 30 companies implicated in their investigations have been compelled to regularise the employment of more than 49,000 workers in the last four years, Milan prosecutors said in their decree.

A renewal of the national contract for the logistics sector signed last December contained new rules aimed at stamping out illegal practices.

However, "without substantial changes to the business policies adopted by the key players in the sector, the new rules appear likely to be effectively disregarded," the prosecutors wrote in their decree.

($1 = 0.8528 euros)

(Reporting by Emilio Parodi; Editing by Joe Bavier)