Business news from Ukraine

ANTIMONOPOLY COMMITTEE OF UKRAINE INVESTIGATING PRICING IN TRANSPORT MARKET ON FIRST DAYS OF LOCKDOWN

The Antimonopoly Committee of Ukraine (AMCU) is investigating the formation of prices in the transportation market due to a sharp price rise for the services of the main players in the taxi market on the first day of lockdown, Head of the Northern Territorial Branch of the AMCU Oleksiy Khmelnytsky said on his Facebook page on Wednesday.
He said that on the first day of lockdown, the prices for taxi services of the three largest organizers of transportation via mobile applications simultaneously increased by 3-4 times, which is unacceptable.
“Already in the evening of April 6, taxi prices fell noticeably. It should be noted that the demand did not decrease [there were no less trips, the demand was constant] and lockdown was not canceled. This is the reaction of these companies to the indignation of Kyiv residents, the media and the AMCU’s reaction. I am convinced that companies can adjust prices on their own, not only automatically, given the critical situation with COVID-19 in Kyiv. Could there be any signs of violation of competition laws [on coordination of actions]? In my opinion, yes,” Khmelnytsky said.
He also said that the AMCU should definitely respond to a large number of appeals from Kyiv residents.
“We cannot ignore citizens’ appeals; that is why we launched our probe. This is the law […] In fact; the situation on the transport market [whatever you call it, for people it is taxi services] has not been studied by anyone. That is why we started the study. We will draw conclusions based on its findings,” he said.
At the same time, Khmelnytsky noted that the AMCU perfectly understands all the specifics of the work of programs and applications, which are rather difficult to control.
According to him, if, based on the findings of the study, the AMCU does not receive evidence of anticompetitive concerted actions of the largest market players, the committee will definitely inform about it.
“If we get evidence of a violation of competition legislation, we will open a case, make a decision and fine the violators. If it turns out that the legislation and rules do not correspond to modern technologies, we will turn to legislators with a proposal,” the head of the AMCU Northern Territorial Branch said.
As reported, on April 5, taking into account the imposition of strict quarantine, prices for taxi services, in particular in Kyiv, increased several times.
Bolt taxi ordering service (formerly Taxify) has decided to forcefully adjust the coefficient that affects the increase in cost during the period of increased demand.
Taxi ordering services Uklon and Uber told Interfax-Ukraine that their pricing systems depend on many factors, automatically taking into account the situation on the roads, weather conditions, demand and others.

, , , ,

ANTIMONOPOLY COMMITTEE OF UKRAINE INVESTIGATING INCREASE IN SUGAR PRICES BY ASTARTA AND RADEKHIV SUGAR

On April 5, the Antimonopoly Committee of Ukraine (AMCU) launched an investigation into anticompetitive concerted actions on the primary sugar market against Astarta Group and Radekhiv Sugar LLC (Lviv region), the committee said on its website on Monday.
The state regulator said that over the past few months it had studied the situation when these companies, which together occupy a significant share of 40% to influence the Ukrainian beet sugar market, in September-November 2020, similarly increased wholesale selling prices for sugar by an average of 48%.
The committee said that it sees no objective grounds for such a price increase, since there was no sugar deficit in Ukraine at that time, taking into account the transitional reserves, import volumes and a decrease in domestic consumption. The committee said that the production of this product in Ukraine last year decreased by 22.3% compared to 2019, the yield of sugar beet decreased by 7.8%, its sugar content by 1.7%, and its sown area by 2.7%.
It is also specified that Astarta Group and Radekhiv Sugar similarly limited competition in the market, having received the opportunity to raise prices above the competitive level, although they are in different conditions of economic activity.
The AMCU said, citing data from the London Stock Exchange, that in September-November 2020, world prices for beet sugar did not grow as sharply as in Ukraine, and there were no significant fluctuations in foreign exchange markets or an increase in taxation.
“As part of the investigation, in addition to Astarta and Radekhiv Sugar, the committee is studying the actions of other manufacturers in this market. I emphasize that the AMCU will not limit itself to checking possible non-competitive actions in the sugar market. In the near future, we will investigate the situation in the markets of other socially important products, which have risen in price recently,” the press service said, citing head of committee Olha Pischanska.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes eight sugar factories, agricultural enterprises with a land bank of 243,000 hectares and dairy farms with 25,000 cows, seven elevators, a biogas complex and a soybean processing plant in Poltava region (Globino Processing Plant LLC).
Radekhiv Sugar LLC is one of the largest sugar beet producers in Ukraine with production facilities in Radekhiv (Lviv region), Chortkiv, Khorostkiv, Kozova and Zbarazh (all located in Ternopil region).
According to the data on the company’s website, Radekhiv Sugar is part of the Pfeifer & Langen Investments group of companies (Poland), which, except for a Ukrainian asset, also owns five sugar factories in Germany, shares in enterprises in Poland, Romania, Italy, Hungary, Slovenia and the Czech Republic.

, ,

IMPERIAL TOBACCO LOSES APPEAL ON ANTIMONOPOLY COMMITTEE OF UKRAINE FINE

The Pivnichny (Northern) Economic Court of Appeals on February 2 rejected the complaint of Imperial Tobacco Ukraine and Imperial Tobacco Production Ukraine against the decision of the Antimonopoly Committee of Ukraine (AMCU) on a fine of UAH 460 million on suspicion of anti-competitive concerted actions of cigarette manufacturers and distributors.
“Imperial Tobacco Ukraine and Imperial Tobacco Production Ukraine will appeal the decision of the Court of Appeals in the Supreme Court. In addition, the companies are simultaneously preparing to transfer the case to the international investment arbitration, because it is becoming increasingly clear that in Ukraine foreign investors cannot count on a fair trial,” the group of companies said in a press release.
According to Imperial Tobacco, the decision of the court is the result of political pressure.
“Unfortunately, the appellate link of the judiciary has demonstrated the same bias and political bias as the court of first instance. This development of events gives another alarming signal to the community of foreign investors about the real state of legal proceedings in Ukraine,” the press service of the company said citing director general of Imperial Tobacco Rastislav Cernak.
The company clarified that the fine of UAH 460 million was paid in full the day after the loss in the court of first instance – July 21, 2020, in order to prevent the accrual of additional penalties and to avoid further pressure on the company’s operating activities from the AMCU.

, ,

ANTIMONOPOLY COMMITTEE OF UKRAINE STARTS STUDYING ELECTRIC CAR CHARGING MARKET

The Antimonopoly Committee of Ukraine (AMCU) has begun collecting information and studying the electric car charging market, the committee said on its website.
It notes the intensive growth of the electric car market in recent years, while the market for commercial charging stations is also growing. In this regard, the AMCU starts monitoring it in order to control compliance with the legislation on the protection of economic competition.
“The purpose of this control is to determine the state of the competitive environment in the market and its assessment; to identify and determine the problems in the market that hinder the development of competition; to ensure compliance with legislation on the protection of economic competition; to prepare, if necessary, based on the results of such control, proposals for the implementation of measures aimed to develop competition,” the committee notes.
The AMCU called on current and potential market participants to provide information and considerations on possible economic, organizational, administrative and technical barriers that may prevent new companies from competing in the electric vehicle charging market.
As reported, Minister of Infrastructure Vladyslav Krykliy said in November 2020 that Ukraine supports the use of ecological modes of transport in cities, therefore, as part of the National Transport Strategy until 2030, it plans to completely replace all urban public transport with electric one and create the appropriate infrastructure for this.

, , ,

AMC PERMITS DRAGON CAPITAL TO ACQUIRE FINANCE.UA, MINFIN.COM.UA

The Antimonopoly Committee of Ukraine (AMCU) has permitted the Dragon Capital investment company to acquire over 50% of the shares of Treeum Holdings Limited, the owner of the Finance.ua and Minfin.com.ua publications, as well as Finline, Bank Online and Multi.ua.
“Permission is granted to Dragon Capital Investments Limited (Nicosia, Cyprus) to acquire shares of Treeum Holdings Limited (Larnaca, Cyprus), which grants that 50% of the votes in the company’s management body are exceeded,” the committee said on its website on Monday.
According to the information on the holding’s website, Treeum is a Ukrainian online platform that compares and sells financial products, supports an online currency exchange platform, reliable ratings and statistics, as well as news, comments and professional analytics.
The revenue of Finance.ua in 2019 amounted to about UAH 17.8 million, net profit – about UAH 0.5 million, that of Minfinmedia – UAH 36.9 million and almost UAH 1 million, respectively, Banking Class – UAH 10.9 million and UAH 0.1 million.
Multi.ua and Finline last year saw revenues of UAH 6.6 million and UAH 1.3 million, respectively, and a net loss of UAH 0.7 million and UAH 2.3 million.
According to the public register, Ksenia Vaisman, a Russian citizen living near Kyiv, is indicated as the beneficiary of Treeum Holdings Limited.
This year, USAID Financial Sector Transformation Project (FST) financed the launch of the LIGA.Money platform by LigaBusinessInform Investment Agency. According to the agency, NV and Finclub also participated in the competition, while the companies of Treeum Holdings were not admitted to it.
Dragon Capital is one of the largest investment companies in Ukraine. It works in the field of direct investment and financial services, provides a full range of investment banking and brokerage services to corporate and private clients. The ultimate beneficiary of Dragon Capital in the public register is a Czech citizen, President of the European Business Association Tomas Fiala.
Fiala is the owner of the NV media holding, which includes the eponymous magazine, portal and radio.

, , ,

COMPETITION AGENCY FINES NOVO NORDISK

The Antimonopoly Committee of Ukraine (AMCU) has made a decision on the case of violation of competition law by the pharmaceutical group Novo Nordisk, fining it and its distributors UAH 188 million, according to the AMCU website.
“Thanks to the introduced mechanism for providing after-sales discounts, distributors of the Novo Nordisk group companies received additional income significantly higher than 10%, as provided by the legislation of Ukraine, and in some cases – up to 80%. The chain of opaque pricing led to an unjustified overstatement of the selling prices for Novo Nordisk medicines and provided distributors with competitive advantages, without which other participants in the sales of Novo Nordisk medicines could not compete with them,” the message says.
It is clarified that it is about setting prices for medicines intended for the treatment of diabetes mellitus, problems with growth retardation and for the treatment of hemophilia by Novo Nordisk A/S (Denmark), Novo Nordisk Health Care AG (Switzerland) and a number of pharmaceutical distributors and pharmacies: Medpharkom LLC, Medpharkom-Center PrJSC, BaDM LLC, BaDM-B LLC, Pharmacy 3I LLC, Ganza PrJSC, Pharmadis LLC and Medpharm LLC.
AMCU fined Novo Nordisk A/S UAH 134 million, Novo Nordisk Health Care AG UAH 1.7 million, PrJSC Medpharkom-Center UAH 28.7 million, BaDM Group UAH 16.7 million, LLC Pharmacy 3I LLC UAH 680,000, PrJSC Ganza UAH 340,000, LLC Medpharm UAH 5.5 million.
Production at Medpharkom LLC and Pharmadis LLC was discontinued due to the liquidation of the companies.

,