About 50% of Ukraine’s coffee market operates in the shadows, leading to annual losses of billions for the state budget. According to experts, the country is missing out on approximately $7 billion due to tax evasion caused by large-scale coffee smuggling and the counterfeiting of products from leading global brands.
This is reported by Finway
Volumes of the Shadow Market and Evasion Schemes
Statistics show that the average Ukrainian consumes about 3.5 kg of coffee each year. If these figures are extrapolated to the entire population, the actual volume of the coffee market in Ukraine is estimated at 85–105 thousand tons per year. Meanwhile, official statistics record only 49 thousand tons of legal imports – less than half of the actual demand.
A large portion of coffee reaches store shelves and food service establishments through illegal means. Evasion schemes involve undervaluing customs costs during importation, as well as importing under the guise of “humanitarian aid” for the military, which is later sold in retail.
“Every second cup of coffee in the country is either smuggled or outright counterfeit, as entire criminal groups currently specialize in the counterfeiting of products from well-known global brands. He explained how such a scheme works: dealers buy the cheapest or even nearly expired coffee beans in Europe for a pittance, then transport them to Ukraine, roast them on underground roasters, and package them in branded bags.”
Experts recommend distinguishing smuggled coffee by its significantly lower price, which can differ by three times from the cost of legal products.
Violating Companies and Calls to Law Enforcement
Among the companies that have been avoiding tax payments for years is LLC “Ukrainian Coffee Company LTD”. According to experts, this company, which has a wide range of products, has not officially imported coffee in the last 10 years. Estimated budget losses from its activities amount to at least $12 million annually. Even greater claims are made against the Odessa-based company “Lider Kava Ukraine”, which sells coffee through a network of entrepreneurs and underpays about $15 million to the budget each year.
The leadership of the parliamentary committee publicly called on the Bureau of Economic Security and other law enforcement agencies to pay attention to the problem of the shadow coffee market, emphasizing that evidence of large-scale violations is publicly available.
At the same time, due to rising electricity tariffs, market saturation, and changing consumer habits, a mass closure of small independent coffee shops is being recorded in the capital.