Business news from Ukraine

CIGARETTE MARKET IN UKRAINE FALLS BY 15% IN 2019 – OPINION

Ukraine produced 51 billion cigarettes in 2019, which is 15% less than in 2018, Country General Manager of Imperial Tobacco in Ukraine Rastislav Cernak has said.

“Compared to European countries, the decline in the volume of the cigarette market was indeed proceeding rapidly. According to our data, the market dropped by 15% compared to the previous year. In 2011-2017, the decline was less than what we observed in 2019,” he said in an interview with Interfax-Ukraine.

There are several objective reasons for the fall of the Ukrainian market, according to Cernak, including an increase in excise duty.

“In 2018, the excise tax on cigarettes increased 30%, in 2019 we had two increases – in January by 20%, and in July, by an additional 9%. A significant increase in excise tax led to an increase in the price of a pack of cigarettes, which caused growth in illegal trade,” he said.

The general manager of Imperial Tobacco in Ukraine said that over the past few years, the level of illegal trade has doubled. According to TNS Kantar research, in 2019, the level of illegal trade reached 7%. The upward trend has been observed since 2017.

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MARKET OF NEW PASSENGER CARS IN UKRAINE GROWS BY 8% IN 2019

The initial registration of new cars in Ukraine in 2019 increased by 8% compared to 2018, to almost 88,500 units, Ukrautoprom reports.
According to a press release on the association’s website, the market rose, despite the pressure exerted by the sharply increased imports of used cars and the legalization of cars with European registration.
As reported, with reference to data from Ukrautoprom, in 2018 the market of new passenger cars did not exceed the indicator of 2017, amounting to 81,800 units.
The leader in 2019 was the Renault brand with the registration of 14,603 cars (in 2018 it ranked second after Toyota with 8,722 cars), followed by Toyota with 12,570 registered cars (in 2018 it ranked first with 10,082 cars). KIA ranks third with 7,586 vehicles.
The top ten rating of 2019 also included Skoda with 6,231 cars, Nissan with 5,333 cars, Hyundai with 5,099 vehicles, Volkswagen with 4,675 cars, Suzuki with 2,614 cars, Mazda with 2,483 cars, and Peugeot with 2,366 cars.

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MARKET OF NEW COMMERCIAL CARS IN UKRAINE 6% DOWN

The initial registration of new commercial vehicles in Ukraine (including heavy vehicles) in January-November of this year decreased by 6% compared to the same period in 2018, to 10,800 cars, the Ukrautoprom association reports.
In November 1,007 new commercial vehicles were registered, which is ten units less than in November 2018, and 11% less than in October of this year.
Most often last month, like a year earlier, Renault cars were registered, whose sales grew by 30%, to 216 cars. Fiat ranks second with 142 cars with an increase of 14%, and Volkswagen ranked third, the registrations of which grew by 2%, to 89 units.
Ford ranked fourth (81 registered cars, up by 4%), and Mercedes-Benz ranked fifth, despite a 43% drop in registrations from November 2018, with 62 cars.
Belarusian MAZ vehicles lost 43% in registrations and occupy the seventh place of the November rating with 48 vehicles, Russian GAZ ranks 12th with 28 vehicles (down by 57%), and Ukrainian KrAZ ranks 14th (22 vehicles against 12 in November last year).
As reported, in 2018 the demand for new commercial vehicles in Ukraine increased by 10%, to 12,700 units, while registrations of imported used cars increased by almost a quarter, to 38,800 units.
According to the statistics data of Ukrautoprom, in November 2019 some 186 buses (all classes) were also registered for the first time in Ukraine, which is 4% more than in November last year and 3% less than in October 2019.

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JAPAN TOBACCO INTERNATIONAL BRINGS LOGIC COMPACT ELECTRONIC VAPORIZER PRODUCT TO UKRAINIAN MARKET

Japan Tobacco International (JTI) is bringing the new Logic Compact electronic vaporizer to the Ukrainian market, which will be available in 27 countries by the end of the year. This was announced by JTI Ukraine Marketing Director Oleksandr Ponomarchuk during the presentation of Logic Compact in Kyiv.
“We are launching the product in Kyiv. If to look at the market, then electronic vaporizers account for 7.4%, tobacco vaporizers for 8.4%, and cigarettes for 84.2%. Moreover, the e-vape market in Kyiv doubled in a year from $33 million in 2018 to $63 million in 2019. Until 2021, we expect growth in Kyiv to $106 million and in Ukraine in general to $290 million,” he said.
Currently, the product is presented in 20 countries.
According to Ponomarchuk, the largest consumers of Logic products are the markets of Britain, France and Italy, and with the advent of Logic Compact, the largest market has become the Russian Federation.
According to him, the company sees a great potential of the product in the electronic cigarette market in Ukraine.
“We take into account market regulation. We understand that it will come sooner or later. However, the approach is based on potential – if the market is profitable, we go there,” he said.
At the same time, he said that studies have shown that product vapor contains 95% fewer components recommended by the World Health Organization for reducing in cigarette smoke.
The product will be available from November 29 in the Rozetka online store and in the Lavina Mall and River Mall shopping centers. The retail price of the device is UAH 699, a set of two replaceable cartridges costs UAH 99.
Japan Tobacco International is an international division of Japan Tobacco. It produces cigarettes under the brands Winston, Mevius, Camel, Sobranie, Glamor, and LD.

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BILLS ON DETECTIVE SERVICES COULD REDUCE MARKET TO COLLECTING INFORMATION

Bills on detective services could reduce the market to only collecting and capturing information, lawyers of Kinstellar law firm – Counsel Iryna Nikolayevska and associate Julia Palaida – have told Interfax-Ukraine, commenting on bill No. 1228 submitted by MP Andriy Kozhemiakin (Batkivschyna parliamentary faction) and alternative bill No. 1228-1 submitted by MPs Mykola Halushko and Viacheslav Medianyk (both from the Servant of the People parliamentary faction).
The lawyers said that at present, the most popular services of private detectives are the search for missing persons, the search for children hidden by one of the spouses, the search for assets of a person in order to recover them, and the verification of the reliability of business partners and employees.
“If regulation of this sphere is introduced in the format proposed by bills No. 1228 and No. 1228-1, the functions of a private detective will actually be reduced to collecting and recording information, since none of these documents authorizes detectives with powers similar to those of law enforcement agencies. Moreover, the bills do not directly regulate the question of how the court should evaluate the evidence collected by the detective, and whether the court will consider it to be appropriate evidence,” the lawyers said.
The Kinstellar law firm experts believe that the information collected by the detective should be regarded as proper evidence (provided there are no violations during the collection).
“It would be nice to clarify the law in this matter,” Nikolayevska and Palaida said.
Moreover, in general, the lawyers consider attempts to regulate the sphere of private investigations to be positive.

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PRESIDENT’S BILL ABOUT FARMLAND TURNOVER IN UKRAINE ALLOWS LEGAL ENTITIES TO PARTICIPATE IN MARKET

The president’s bill about farmland turnover in Ukraine, which should be published within two weeks, allows legal entities to participate in the land market, acting Minister of Agricultural Policy and Food of Ukraine Olha Trofimtseva has said. “The president’s position regarding legal entities is quite liberal and this is one of the disagreements that exist between us. I believe that certain restrictions, safeguards should be established at the first transitional stage, I advocate a phased opening of the market and, accordingly, its phased liberalization,” she said at a press conference.
According to Trofimtseva, the presidential bill is based on the government’s bill.
“The changes that will be made in it concern legal entities, I think we will see it soon, it will be introduced in the Verkhovna Rada as the president’s bill, but this will be the subject of discussion after the first working day of the Verkhovna Rada, after the formation of the new Cabinet [of Ministers]. This is a question of a week or two,” the acting minister said.
In addition, Trofimtseva said that as part of the land reform, at least six or seven bills will be presented that will be aimed at the normal functioning of the land market.

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