Page 66 - UKRRptNov19

9.1.5 Retail sector news
Ukraine antitrust body fines tobacco firms UAH6.5bn for collusion.
Ukraine’s Antimonopoly Committee ruled on October 10 to impose a fine of UAH6.5bn against the Tedis cigarette wholesaler and other top tobacco companies at a total amount of UAH6.5bn ($260mn) for collusion on the Ukrainian tobacco market, the committee reported the same day. The tobacco companies are blamed in reducing the number of tobacco distribution contracts on the market from “several dozens” to a single contract with Tedis over 2011- 2012. As a result, Tedis's share of the tobacco wholesale market swelled to 99.4% in 2013 and created strict entry barriers for new wholesalers. Wholesaler Tedis was penalized UAH3.4bn. Fines for the local subsidiaries of global tobacco companies are as follows: Philip Morris International (PM US) - UAH1.17bn, Japan Tobacco (2914 JT) - UAH0.92bn, Imperial Brands (IMB LN) - UAH0.46bn, and British American Tobacco (BATS LN) - UAH0.53bn. All the penalized companies assured the media they will appeal the decision. Commenting on it to Interfax-Ukraine, Imperial Tobacco said the committee authorized Tedis's campaign to control top tobacco distributors in Ukraine in 2008-2010. Such permits were considered by the industry as “clear messages” of full correspondence of the concentration of the wholesale tobacco market with local antitrust regulation, the statement said. In its press release, the committee recalled that it imposed a UAH430mn penalty on Tedis in 2016, and after a series of company appeals, the courts upheld the penalty in 2018.
9.1.6 Agriculture sector news
Ukrainian sugar refineries have produced 496,700 tonnes of sugar since August 30, 2019, when the current sugar production season began with the launch of a sugar refinery in Lviv region's Radekhiv district, reports Unian on October 15. “As of October 15, some 496,700 tonnes of sugar had been produced and 3.46mn tonnes of sugar beets had been processed," the press service of the National Association of Sugar Producers of Ukraine (NASU) Ukrtsukor said. 31 sugar refineries out of the planned 32 were in operation in Ukraine as of October 16. Wholesale prices of sugar in the 2019-2020 agricultural marketing year (September 2019-August 2020) may grow by 18% to UAH13,000 ($526) per tonne due to a decline in the country's sugar production. NASU earlier said that a poor yield of sugar beets in Ukraine caused by heavy rains could lead to a reduction in sugar production in 2019, to 1.1mn tonnes. Ukrtsukor says the areas under sugar beet crops in 2019 shrank by a quarter from 2018. Ukrainian enterprises during the sugar refining season of MY 2018-2019 reduced sugar output by 15%, to 1.7mn tonnes.
Livestock production of farm businesses was up 6.9% through September, while household production was down 2.9%. Looking ahead, household milk production is expected to drop by 31% during the 2020s. In contrast, dairy farm milk production is to increase by 38%, according to Olga Kozak, a researcher at the Institute of Agricultural Economics.
66 UKRAINE Country Report November 2019 www.intellinews.com