Business comments on Government’s decision to license the export and import of alcohol

25/ 07/ 2019

Yesterday, July 25, the Government adopted a resolution that excluded import and export of alcohol (ethyl, cognac and fruit, ethyl alcohol rectified grape, ethyl alcohol rectified fruit), alcoholic beverages and imports and export of tobacco products from the list that are licensed by the Ministry of Economic Development and Trade. This decision was the next step after the adoption of the Law on Amendments to the Tax Code (N 2628), which eliminated licenses for the right to import / export alcoholic beverages and tobacco products. That why, since July 1, the import of alcohol products is based on a wholesale license for wholesale operations and on the basis of a retail license for direct sale to the consumer. This cancellation was logical because of financial reasons. In particular, the license for the right of import / export cost 780 hryvnias a year, and the wholesale license 500 000 hryvnas. This is a part of deregulation that was carried out without loss for the budget as funds for administering import licenses exceeded actual receipts. Yesterday, information was disseminated that this resolution had abolished licenses for the export and import of alcohol. However, this information is not entirely true, since licenses don’t have to be purchased since July 1. Yesterdays decision was purely technical and consolidated the statutory norm in the by-law. After all, the Government can’t decide to cancel or issue licenses because this is exclusively a Verkhovna Rada competence, - explained Christina Linichenko, Manager of the Committee on Import and Trade of Alcoholic Drinks of the European Business Association. At the same time, one more step needs to be made in this context, in the Law on state regulation of alcohol it is important to provide a norm in order to prevent the use of a retail license instead of a wholesale one in wholesale trade. This is needed in order for a business engaged in retail trade of alcoholic beverages not to accept and sell alcoholic beverages from legal entities or people who do not have a correct license to manufacture for the wholesale trade. It will help to create fairer business conditions and prevent a situation where an unscrupulous businessman bought a retail license but is in truth a wholesaler. The European Business Association hopes that the newly elected Parliament will hear the voice of law-abiding business.

This decision was the next step after the adoption of the Law on Amendments to the Tax Code (N 2628), which eliminated licenses for the right to import / export alcoholic beverages and tobacco products. That why, since July 1, the import of alcohol products is based on a wholesale license for wholesale operations and on the basis of a retail license for direct sale to the consumer.

This cancellation was logical because of financial reasons. In particular, the license for the right of import / export cost 780 hryvnias a year, and the wholesale license 500 000 hryvnas. This is a part of deregulation that was carried out without loss for the budget as funds for administering import licenses exceeded actual receipts.

“Yesterday, information was disseminated that this resolution had abolished licenses for the export and import of alcohol. However, this information is not entirely true, since licenses don’t have to be purchased since July 1. Yesterday’s decision was purely technical and consolidated the statutory norm in the by-law. After all, the Government can’t decide to cancel or issue licenses because this is exclusively a Verkhovna Rada competence”, – explained Christina Linichenko, Manager of the Committee on Import and Trade of Alcoholic Drinks of the European Business Association.

At the same time, one more step needs to be made in this context, in the Law on state regulation of alcohol it is important to provide a norm in order to prevent the use of a retail license instead of a wholesale one in wholesale trade. This is needed in order for a business engaged in retail trade of alcoholic beverages not to accept and sell alcoholic beverages from legal entities or people who do not have a correct license to manufacture for the wholesale trade. It will help to create fairer business conditions and prevent a situation where an unscrupulous businessman bought a retail license but is in truth a wholesaler.

The European Business Association hopes that the newly elected Parliament will hear the voice of law-abiding business.