Corona subsidies | Cooperatives that made millions in profits received more than 10 million euros in corona support

The biggest support pots seem to have hit the spot: their recipients had zero income in the tax statistics during the pandemic years. Among those supported are also companies that don’t seem to have been in need of taxpayers’ corona help at least very badly.

Corona pandemic hit Finland with a rush in the spring and winter of 2020. The hardest economic effects quickly hit restaurants, which had to close their doors to customers, and events that were canceled or postponed.

The state started pouring large amounts of support into the business world. In the beginning, support was also given automatically to companies in the restaurant industry, meaning that the companies did not have to apply for money, but the support amount was calculated based on information from the Tax Administration and paid directly to the company.

HS collected in summer 2022 with the support of extensive materialwhich were distributed by the state’s Business Finland, ely centers, the Treasury, the Food Agency and Traficom during spring 2020 and May 2022.

By comparing this corona material with the corporation tax income of the pandemic years published by the taxman, one can try to assess, among other things, how well the corona subsidies hit the right address.

The information published by the taxman states the amount of taxable income of each company. It means the amount left over from the company’s profit after deducting expenses and losses from previous years.

Largest individual corona subsidies ended up in companies in the restaurant and tourism sectors. Over Of the companies that received EUR 2.3 million in support, only one made taxable income in 2021. The tax list was decorated with zeros even in the first year of the pandemic.

The biggest corona subsidies can therefore be interpreted as targeted so that at least no additional taxable income was made with them.

Major the support pot, 2.9 million euros, was granted to HMShost Finland Oy, according to HS data. It runs several restaurants at Helsinki-Vantaa Airport. Aviation also took a hard hit during the pandemic.

However, the company’s final support amount is less than this, as the company has returned 200,000 euros of the support.

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In its financial statements, HMShost Finland says that the 2021 result was positively affected by the cost support packages granted by the State Treasury.

The airport’s restaurant company had no taxable income in either corona year. However, HMSHost Finland, which had a turnover of around 30 million euros before the pandemic, has, according to the tax authority’s information, not once accumulated taxable income during its operation. The company, registered in Finland in 2013, belongs to the Italian Autogrill SPA group.

Corona support has also been granted to companies which, in retrospect, do not seem to have been in dire need of taxpayer assistance.

One of those that made a strong result is the concert organizer RH Entertainment, which grabbed more than a million euros in corona subsidies and also made a comfortable taxable income during the pandemic years. In 2021, according to the taxman’s statistics, the income was 920,000 euros. In the first corona year, the taxable income was just under 400,000 euros.

What makes the situation special is that, despite the impressive numbers, RH Entertainment filed for bankruptcy on November 10. Before that, the company had been criticized, among other things Suomen Kuvalehten in the article about surprising cancellations and vague arrangements.

When RH Entertainment first filed for corporate restructuring in October, it explained its weakened finances with the failures of summer 2022.

“The company made big artist engagements for the summer of 2022, which did not sell as expected. The company also had to cancel events for reasons beyond its control”, CEO Riku Huhtala messaged For Iltalehti.

When is considered to be the top of the companies with the most taxable income, according to HS’s data, very few companies have received corona subsidies.

The health service company Mehiläinen Oy had a taxable income of around 40 million euros in both pandemic years. According to Business Finland’s information, the company would have been granted support on four occasions totaling 470,000 euros.

However, Mehilää is told that it has not applied for the aid itself, but rather it is about subsidies from the companies it later bought.

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The regional cooperatives of the S group stand out at the top of the list, of which there are 19. More than half of them had a taxable income of more than 10 million euros in 2021.

A total of 11 million euros in corona subsidies covered by HS’s material were granted to S group cooperatives, an average of just under 600,000 euros per cooperative. The subsidies focused on the first corona year were aimed at restaurant operations, and a good half came to cooperative stores through automatic payment.

According to Henriikka Puolantee, business manager of HOK-Elanto, the subsidies only covered a very small part of the losses suffered by restaurant operations.

Major a single pot went to HOK-Elanto Liiketoiminta Oy operating in the capital region, which in 2020 received a total of 1.3 million euros in corona support on two occasions.

The majority of the amount was separately applied for support, which was paid to restaurant companies to re-employ employees when the restrictions were lifted in early summer 2020.

Branch manager Henriikka to Poland according to the cooperative’s restaurant operations suffered very significant losses in 2020–2021, totaling approximately 34 million euros, and the subsidies only covered a very small part of them.

The pandemic really devastated the hotel and restaurant business, but cooperatives had the opportunity to balance their finances in other ways. When people couldn’t eat in restaurants, they bought food from chain stores to take home.

For example, HOK-Elanto operating in the capital region announced in March 2020 that they will transfer the employees of their restaurants to help with the increased demand in Aleppo, Prisms and S-markets.

HOK-Elanto’s profit before taxes dropped to around eight million euros in the first year of the pandemic, but improved again last year to 24.5 million euros.

Last year, the taxable income of Finnish cooperatives was a total of around 235 million euros, an increase of twenty percent from the first year of the pandemic. The cooperatives paid a total of just under 50 million euros in corporate tax.

Generally taking into account the companies made a clearly better result in Finland in the second year of the pandemic than in 2020.

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Corporate income tax was 7.3 billion euros last year, which is more than a third more than the previous year. The number can be considered a kind of record: more tax has been collected than this only once before, in 2000.

Presumably, similar news will also be reported on tax day in November next year. The good mood in the business world has continued this year, which has been reflected, among other things, in strong employment.

In March In 2020, the impact of the corona on the Finnish economy was generally smaller than feared.

Commissioned by the Ministry of Labor and Economy, already published in spring 2021 in the report it is stated that the blow to Finland was most likely dampened by the structures of the welfare society, which protected both employees and companies.

Business support was initially largely distributed through the government’s Business Finland. This was quickly found to be problematic, as the subsidies required development projects from the companies. For example, restaurant companies had to find development targets for themselves, even though the biggest problem was simple: the sudden disappearance of customers.

Later, the money was distributed in the form of cost subsidies, which were given to companies whose turnover dropped significantly.

In addition to various direct subsidies, companies were also supported in the corona crisis in other ways, such as by changing the regulations regarding layoffs and bankruptcies.

Ministerial the study commissioned also stated that corona subsidies were also heavily targeted at industries whose turnover did not decrease or decreased very little. Examples of such include communication and construction.

Large companies were more likely to apply for corona subsidies than others. Companies with fewer than five employees were clearly less likely than others not to apply for subsidies.

To a large extent, corona support was also left undistributed. In Europe, 2020 is the first corona year for companies was planned direct subsidies of a maximum of 315 billion euros, of which 136 billion had been distributed in December of the same year.

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