12/ 02/ 2014

We are happy to inform you that some Draft Laws that EBA stood against were not included in the VRU agenda, approved by Resolution on the agenda for the fourth session of the Verkhovna Rada of Ukraine of the seventh convocation (February- July 2014) No 739-VII, which was adopted on 6 February.

Inter alia, the Draft Laws that were withdrawn from the Verhovna Rada of Ukraine related to the following issues:

Prohibition of Food Additives’ (Sweeteners) Import and Use

Draft Law on Amendments to Certain Legislative Acts of Ukraine (concerning the prohibition of the importation and use of certain food additives) No 2643 dated 28 March 2013 prohibited the usage of sweeteners in food production in Ukraine in order to increase the competitiveness of the domestic sugar industry. However, there are a number of products which technically cannot consist of sugar. This Draft’s adoption could have inevitably leaded to huge technological and financial problems for fair producers who manufacture products strictly conforming with Ukrainian legislative norms and best international practices.

Prohibition of Palm Oil Use

Draft Law on Amending the Law of Ukraine “On the safety and quality of food” (ban on the use of palm oil and its fractions in food) No 2492 dated 7 March 2013 was aimed at banning the usage of palm oil and its fractions in food production. Nevertheless, one should note that palm oil is used in confectionary production and in the case of a ban, would lead to a change of the recipes and technological production of world-recognized food stuffs. We consider it necessary to discuss the problem with businesses focusing on the issue of regulation of non-controlled use of palm oil, falsifications and proper labelling and recommend to the relevant ministries and other authorities to study this issue comprehensively, as well as to specify the existing DSTU (state standard) “Palm oil. General specifications” in order to establish more strict requirements and standards on palm oil using procedures as well as to develop and improve their controls over palm oil usage as a substitute for milk fat.

Excise Taxes Increasing

Draft Law On Amendments to the Tax Code of Ukraine (regarding increasing certain excise taxes and harmonization of production, retail and consumption certain excisable goods) No. 2876-1, in particular, a) introduced a threefold increase for certain excise taxes; b) introduced mandatory requirements on the sale of alcohol in a limited area or shop in specialty stores.

This increase in the excise tax could have led to higher prices of alcoholic beverages for the end user as well as negative effects on functioning of the market of the above products, in particular, the decrease in production and sales, and as a result – reduction of revenues to the state budget of Ukraine. In addition, the new requirements for commercial premises would negatively impact the ability to conduct such a business for a significant number of business entities because not all stores have the ability to provide specific areas. Thus, the selling of alcoholic beverages will be available only to large chain stores. Moreover, please note that Draft Laws initiated by the Cabinet of Ministers of Ukraine, which have not passed the first reading in accordance with paragraph 3 article 105 of the VRU Regalement (article 105 of the VRU Regalement) these Draft Laws are considered as withdrawn.

The Association expresses its appreciation to member companies for their participation and persistence in solving business problems. We will continue to work to resolve problematic issues in order to protect the legitimate interests of our members.


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