Financial dispute breaks out between Henkel and Budelpack

By Guy Montague-Jones

- Last updated on GMT

Related tags: Manufacturing, Henkel

Budelpack is locked in a financial dispute with Henkel that puts the future of another of its cosmetic factories in doubt.

At the end of last year Budelpack closed its factory in South Wales due to a slump in sales only a year after buying the business.

Dispute over payment and cancellation of order

Now Budelpack’s cosmetics plant in Lièpvre, France, is also in financial difficulty after Henkel refused to pay for around €2m worth of products manufactured at the site on its behalf.

Henkel also withdrew an order for 6.5 million units with the cosmetics factory that it had sold to Budelpack in 2003. Budelpack claims that these actions were illegal.

Henkel and Budelpack have a long history together surrounding the French factory, which today employs 120 workers. In 2003, Henkel sold the manufacturing plant to Budelpack and since then a strong business relationship was established with Henkel becoming the main client.

Now that relationship appears to have gone sour. Responding to the allegation that it acted illegally Henkel has published a strong denial.

In a statement, Henkel said: “While deploring the situation in which the employees of the French subsidiary of Budelpack find themselves, Henkel can not be held responsible and opposes resolutely inadmissible attempts by Budelpack to put pressure on Henkel.”

Outstanding debts from purchase of factory

Henkel claims Budelpack has still not paid outstanding debts from the purchase of the French factory in 2003 that add up to around double the amount that Budelpack is demanding.

Concerning the cancellation of the order for 6.5 million units, Henkel claims the contracts mention a certain volume of orders but reaching that volume is not obligatory.

Furthermore, Henkel said it falls on Budelpack to search for other clients for its French subsidiary and that there was no exclusivity agreement between the companies.

Budelpack declined to respond to CosmeticsDesign.com's invitation to comment on Henkel's allegations.

Related topics: Business & Financial

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