Erling Astrup, a 'Nervigian' Struggling with Taxes and Red Tape
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Erling Astrup, a 'Nervigian' Struggling with Taxes and Red Tape

AN MBA GRADUATE FROM SDA BOCCONI, HE LEFT A POSITION AS BANK MANAGER IN OSLO AND ACQUIRED THE WINE COMPANY NERVI IN PIEDMONT, LEADING IT TO SEIZE FOREIGN MARKETS

The Norwegian Erling Astrup had tasted a Nervi wine for the first time in 1995, while he was in Milan, attending SDA Bocconi’s Master of Business Administration. He could not imagine that sixteen years later he would leave his position in Oslo as Head of Corporate Finance at the SEB bank and acquire that wine company, which has eight hundred years of tradition and is headquartered in Gattinara (in Piedmont) since 1906. "The company was on the brink of bankruptcy. The wine was great, the skills were there, but there was no distribution network".
 
The Norwegian - or "Nervigian", as he likes to joke – CEO has restructured the company by opening to the foreign market, which now provides 75% of sales, but has also had to confront a number of all-Italian obstacles. "The first is the incredibly high cost of labor. It is detrimental to a company like ours that sells quality wine and needs to employ a lot of people who work the vineyard as tailors would. With labor costs comparable to that of other European countries, we could double the employees and farm many more hectares, increasing quality and volume”. The second obstacle is the way taxes are configured. "In almost all other countries you pay a tax when you have a profit, in Italy you pay even if you're at a loss or are investing. For a foreigner that is counterintuitive and difficult to accept. The third problem is that the public sector is good at claiming its credits, but bad in paying its debts”. The complexity of the bureaucratic machine makes things worse. "In the office we have four employees. One and a half work exclusively to interface with bureaucracy. The cost of compliance is very high. And everything still goes on paper, stuff from the Stone Age. Having studied for eighteen months in Milan I knew I had to face a difficult system. I knew I had to take into account bureaucracy and inefficiencies as costs in the balance sheet, but I did not imagine they were so high".
 
Nevertheless, Astrup praises the competence of the Italians and their ability to get through rules and bureaucracy: "If an Italian can make it in his country, he can make it anywhere".

by Claudio Todesco

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