The way for the privatization of distilleries is open. The Government has approved the Program of Industry Reform

On August 12, 2020, the Cabinet of Ministers of Ukraine adopted a Resolution “On Approval of the Program for Reforming and Developing the Alcohol Industry for 2020-2023.”

The purpose of the Program is to create conditions for the formation of a competitive market of ethyl spirit in Ukraine and increase its efficiency, meet the needs of the economy in sufficient quality alcohol, increase the export potential of the alcohol industry, the formation of economically reasonable prices for alcoholic beverages, creating new employing opportunities.

Specified Program comprehensively analyzes the conditions of the alcohol industry and offers a systematic action plan for the next 3 years, which allows not only to demonopolize the market, but also provides control over the production and circulation of alcohol.

In addition, the approval of the Program will allow the State Property Fund of Ukraine to begin privatization of alcohol objects. Among other things, the document provides for a comprehensive audit of state enterprises in the spirit industry, inventory accounting of assets of Concern “Ukrspyrt” and State Enterprise “Ukrspyrt”, as well as further privatization of all inventoried enterprises after their transfer to the Fund.

The program includes:

 Legislative initiatives:

-         improvement of the legislation on accounting of ethyl spirit and products of technical and chemical purpose with use of counters of volume of the made production;

-         regulation at the legislative level of the issue on stimulating the development of small distillate productions by defining the terms “agricultural distillates”, “alcoholic beverages” and establishing requirements for the material and technical base of small distillate productions;

-         regulation at the legislative level of issue on the legal protection of geographical indications of alcoholic beverages;

-         adjustment of the legislation provisions on approval of losses and yield norms of ethyl spirit, bioethanol, distillates during their production and norms of losses of ethyl spirit during production of alcoholic beverages;

-         alignment with the legislation of the Instruction on Acceptance, Storage, Release, Transportation and Accounting of Ethyl Spirit, approved by the order of the Ministry of Agrarian Policy of April 13, 2009 No 264;

Implementation of electronic control system:

-         introduction of electronic licensing of alcohol production and circulation;

-         approval of the Procedure for Maintaining the Unified Register of alcohol storage places in electronic form;

Audit and privatization:

-         reforming state enterprises in the spirit and alcoholic beverage industries ;

-         conducting a comprehensive technical and financial audit of state enterprises in the spirit and alcoholic beverage industries;

-         inventory of existing assets of the State Concern of Alcohol and Liquor Industry (Concern “Ukrspyrt”) and the State Enterprise of Alcohol and Liquor Industry “Ukrspyrt”;

-         further privatization of all inventoried enterprise of Concern “Ukrspyrt” and SE “Ukrspyrt” after their transfer to the State Property Fund of Ukraine.

The Program also proposes measures aimed to stop the sale of spirits and it is bottling by the trade establishments, which do not meet the requirements of the law, and strengthening the responsibility for the illegal manufacture, storage, sale or transportation for sale of excisable goods.

Implementation of this Program will provide until 2023:

-         increase in production and sales of ethyl spirit for food needs by 20%,

-         increase in the production and sale of denatured ethyl spirit for technical needs by 20%,

-         increase in production and sales of bioethanol by 10%,

-         increase in production of distillates and spirits by 15%,

-         reduction of the “shadow” market of ethyl spirit,

-         creation of 500 work places.

In general, the Program will create a competitive market for ethyl spirit in Ukraine, attract investment in the industry, modernize enterprises, expand export potential, and ensure the growth of bioethanol production.

Demonopolization of the market and strict control by the State will counteract the "shadow" market of spirit and increase liability for violations.

To recall, Dmytro Sennychenko the Head of the State Property Fund of Ukraine stated his readiness to start the process of privatization objects of Ukrspyrt, 12 proposals of which have already been submitted to the Fund for privatization. Read more: bit.ly/3417taX