The State Property Fund of Ukraine is preparing to privatize eight distilleries with a total value of 250 million UAH over the next two months. This move is part of a large-scale reform aimed at breaking the monopoly in the alcohol market, combating the shadow sector, and attracting new investments in the industry.
This is reported by Finway
Privatization of the Alcohol Industry: Current Status and Prospects
The large-scale process of privatizing enterprises in the alcohol industry began back in the fall of 2020. At that time, there were 78 state-owned enterprises involved in alcohol production, 41 of which belonged to the state enterprise “Ukrspyrt,” and another 37 to the namesake concern. All these entities were included in the privatization program.
Currently, the State Property Fund is attempting to sell a number of distilleries at reduced prices. In particular, the Zarubynsky distillery is being offered for sale at 77.9 million UAH, which is half of the initial price. Additionally, the Borchivskyi site for alcohol storage and production (13.8 million UAH), the Kholmy distillery, the Uladyvskyi distillery, and the Korostyshiv distillery are also being prepared for privatization.
Issues with Odesa Portside Plant Privatization and New Pricing Approaches
At the same time, the auction for the sale of the “Odesa Portside Plant” with an initial price of 4.49 billion UAH did not take place due to a lack of bids from potential investors. The State Property Fund explains that the privatization conditions for the OPP are complex: the enterprise requires significant investments and has a number of specific requirements for the investor. In particular, it is necessary to ensure the preservation of the main areas of activity, invest at least 500 million UAH in modernization and development, and settle accumulated debts for salaries and to the budget amounting to over 366.8 million UAH.
“The lack of demand at the outset may indicate that the initial price exceeds the market value combined with other financial obligations,” the SPFU explained.
In response to the situation, the Ministry of Economy supported a draft law proposing a mechanism for gradual reduction of the starting price for large privatization objects. According to ministry representatives, this will help prevent scenarios where assets receive no bids due to inflated starting prices and additional financial burdens.
Among the main tasks of the state remains the preservation of the OPP, ensuring its development, and attracting a strategic investor who can modernize the enterprise and restore production capacities.