ABSTRACT
Calisto Tanzi’s dairy operations flourished in the late 1960s after he adopted an innovative process called ultra-high-temperature (UHT) pasteurization. As Tanzi expanded his dairy operations, he changed the company’s name to Parmalat, combining Parma with latte. Parmalat’s UHT pasteurization process distinguished the company’s milk from other milk sold in Italy at the time. During the 1970s, Tanzi used Parmalat’s milk profits to finance production of cream, yogurt, butter, fruit juices, and other processed foods. While Calisto Tanzi acted as Parmalat’s chairman and chief executive officer, Tanzi’s brother Giovanni and son Stefano served on Parmalat’s board and were members of its executive committee. On December 9, Parmalat’s board announced that it had hired turnaround specialist Enrico Bondi to draw up a restructuring plan for the consolidated company. The Parmalat fraud began as an attempt to hide operating losses. Parmalat’s South American operations were unprofitable from the beginning.
