In our weekly look into the world of business, Luke Pritchard from our corporate & commercial department, looks at a big decision facing Caffe Nero…

For its 600 coffee shops in the UK and Ireland, Caffe Nero reported profits to the end of May of £257.6m. Its corporation tax bill for the period was 0.

Caffe Nero is part of a group of companies called Rome Pikco, itself part of a wider group whose parent company, Saratoga, is incorporated in the Isle of Man.

As Rome Pikco made an annual loss, the corporation tax liability for Caffe Nero was negated.

This group structure is not uncommon, and is certainly not illegal. But what price will Caffe Nero attach to the bad publicity the tax saving may generate?

In response to similar criticism, Starbucks recently changed its corporate structure.

If Caffe Nero holds its nerve and sticks to its current structure, it will be interesting to see whether the company is reporting growing profits this time next year, or whether the consumer’s social conscience extends to where they buy their morning latte.