Portuguese company licensed to produce Tupperware forced into liquidation despite credits after US holding woes
In January the senior management of Tupperware Lusitania went to New York in a bid to save the factory and its jobs following the sale of the US Tupperware business to a group of creditors comprised of Stonehill Capital Management Partners and Alden Global Capital in December, and discovered that Tupperware Lusitania was not included in the sale operation.
The result was that Tupperware Lusitania, which has a factory in Montalvo, in the district of Constância, would no longer be allowed to use the Tupperware name and brand and other intellectual and property rights after January, 8, 2025 reports business daily Negócios.
In other words it could only accept orders and send Tupperware products up until this date.
The Swiss company Tupperware Products A.G. (TPAG) for whom Tupperware Lusitania worked under a tolling agreement contract, tried, without success, to get the new owners of the group to authorise an extension on the licence for an additional period of 45 days.
Given the situation that was beyond its control, the managers of Tupperware Lusitania, João Oliveira Sousa and João Ribeiro Pinguinhas held discussions with the owners of the group to try and keep the company going and save 192 jobs.
At a meeting that took place in New York on January 14, they received the confirmation that the Portuguese operation did not figure in the set up of the new group that holds the Tupperware brand.
In other words, since the company was entirely devoted to producing Tupperware products and with a cashflow of only €433,647,49 and with no prospect of relevant monies coming in, the Portuguese company was no longer in a position to meet its obligations.
It also meant that it would have to cancel all of its contracts in force and pay around €5,000 in compensation to its 192 staff.
And despite the local company in Portugal being in credit rather than debt, it is unlikely to receive any credits owed by the group because of the holding’s financial problems so credits of around €21.9 million within the group are now seen as impairments.
Tupperware sales revenues worldwide stood at US$1.37Bn in 1996, the year it was listed on the New York Stock Exchange with sales revenues peaking at US$2.67Bn in 2013.
However, revenues fell over the next few years and by 2022 stood at US$1.3Bn. In September last year Tupperware Brands filed for bankruptcy in a US court as demand fell and losses mounted, the stock plummeted but the debts piled up.
And even though the Portuguese subsidiary that held the licence rights to produce Tupperware goods in Portugal was not in debt, it can no longer produce Tupperware goods under the new arrangements.
And although Tupperware had done well in Asian and Far Eastern markets in recent years, following the pandemic people started spending less and turned to cheaper food storage alternatives, reports Reuters.
Another problem was that its business model had relied on direct sales. According to the bankruptcy filing, consumers now prefer making purchases online, and only a small share was purchased via direct sales.
It had historically relied on independent sales representatives to move its products, but the strategy failed to reach modern consumers according to the company.
In other words, everyone knows what Tupperware is; they just don’t know where to find it according to the Tupperware Chief Restructuring Officer Brian Fox in the filing.
