Kutovoy is waiting for voting in the Parliament for the privatization of “Ukrspirt”

The Ministry of agrarian policy and food of Ukraine expects consideration and support of the bill on de-monopolization of the alcohol industry at this session of the Verkhovna Rada. This reports the press service of the agriculture Ministry.

Soglsna the message of the Ministry of agrarian policy for consideration to the Verkhovna Rada of Ukraine filed 10 bills.

“The draft law on privatization of “Ukrspirt” should be adopted at this session. The question is urgent. There is a corresponding requirement from the IMF. There is a great need to promote the legalization of the market of alcohol, to attract investments in development and modernization of enterprises of the alcohol industry”, – said the Minister of agrarian policy and food of Ukraine Taras Kutovoy.

Kutovoy hopes for a constructive and efficient work of deputies.

“Considering our bills and take appropriate decisions it is extremely important not only for the development of the agricultural sector, but also for the development of the economy of the whole country. Most of our questions require informed, and, very importantly, operational decisions,” commented Kutovoy the beginning of a new session of the Verkhovna Rada.

We will remind, today the state enterprise alcohol and alcoholic beverage industry “Ukrspirt” is a monopolist in the production and sale of alcohol in domestic and foreign markets. Last year it received 16 million UAH of net profit, and in 2014 was 532 million UAH of net loss. Around the company the last few years and then flare up corruption scandals.

16 November 2016 the Cabinet of Ministers supported the draft law “On demonopolization and introduction of market principles of functioning of the alcohol industry” developed by the agriculture Ministry. This law should give a start to privatization of the alcohol industry.

In Ukraine there are 78 distilleries, of which today the main part is not working. The share of shadow turnover of alcohol reaches 45%. It is believed that only in the past year, the budget losses from non-payment of excise duty and VAT shadow manufacturers amounted to about UAH 6 billion.

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The bill proposes to divide the enterprises of alcohol industry into two groups. The first will include those which in seven years can produce food alcohol within the capacity of these facilities. They will be the most expensive. The second group includes the enterprises, the new owners will have the right to produce only industrial alcohol. It is expected that most of the objects of the second group after the privatization will be redesigned for the production of bioethanol.

Also the bill provides for the full liberalization of the export of alcohol from Ukraine. But set a seven-year transitional period during which the import of alcohol will be able to carry out only state-owned enterprises. Full liberalization of the alcohol industry is scheduled for January 1, 2023, the Production of edible alcohol will be available to any entities of private form of ownership without limiting the scope of production.

Kutovoy estimates the volume of budget revenues from the privatization of the alcohol industry is estimated at 5-6 billion. The share of shadow production will be reduced from 45 to 12% in the fourth year since the implementation of the law, according to the Cabinet.

The Minister proposes to privatize every plant that is part of the “Ukrspirt”, separately but in the same time interval, it will contribute to the de-monopolization of the alcohol industry.