The Antimonopoly Committee of Ukraine (AMCU) on Tuesday fined a total of UAH 283.62 million a group of companies (Interstarch Ukraine LLC, PrJSC Dniprovsky starch-molasses plant, PrJSC Intercorn) related to the Roshen confectionery corporation, the beneficial owner of Oleksiy Poroshenko (son of the fifth President of Ukraine Petro Poroshenko).
“The fine was imposed for two violations of the legislation on the protection of economic competition through abuse of monopoly position in the national market for the primary sale of corn syrup and glucose syrups,” the committee said in a press release.
The committee claimed that the specified group unreasonably increased prices for molasses and syrups in April-June 2018, February-March 2019 and October 2020, and also set different conditions for equivalent agreements with buyers of this product during 2018-2020 without justified reasons.
During the investigation, which lasted a year and a half, the committee established that in 2018-2020 the group was the only producer of molasses in Ukraine and the largest and most powerful market participant with shares of 65.49% (in 2018), 93.86% (in 2019) and 79.75% (in 2020), with importers being the only competitors.
It was also found that the group is the only producer of corn starch in Ukraine with shares of 74.26% (in 2018) and 96.79% (in 2019).
“By analyzing the price behavior of the group, it was found that during 2018-2020, the price for the molasses and syrup increased and decreased by it haphazardly. The group carried out price exemptions for certain business entities (confectionery factories),” the committee said.
In particular, according to the committee, one of the buyers of molasses was offered low prices in an attempt to prevent the transfer to a competitor (importer) – Amylco LLC (Rostov region of the Russian Federation), as well as to prevent other buyers of molasses, which capacities located in the eastern part of Ukraine.
“At the same time, the committee established that at present, the Ukrkondprom association has begun to receive initiatives to impose a ban on the import of molasses from the Russian Federation. And on January 8, 2019, by government resolution No. 1154, the ban was introduced,” the committee said.
In addition, the committee revealed that the group applied various conditions in contracts for the supply of molasses with buyers without objectively justified reasons: the procedure for ordering and agreeing on the supply of goods, terms of payment for goods, sanctions, etc.
According to the committee, the group’s participation in vertical integration – from growing corn to producing confectionery products – could give Roshen a significant competitive advantage by purchasing molasses at lower prices than other confectioners.
As a result, the committee fined UAH 210.19 million Interstarch Ukraine LLC, UAH 47.46 million PrJSC Dniprovsky starch-molasses plant and UAH 25.98 million PrJSC Intercorn, and also ordered them to terminate violations.
