Alcohol retailer Bureau of Wines, a major importer of alcohol that operates three Good Wine stores in Kyiv and Donetsk, is accusing the Security Service of Ukraine (SBU) of pursuing false tax evasion charges in order to solicit a bribe.
Addressing
the allegations, the SBU said the company had “violated” the tax
code in 2011 in an Aug. 18 statement, but would not say what amount,
if any, fiscal authorities didn’t recover as result of the apparent
infractions.
According
to Bureau of Wines, the Economy Ministry imposed sanctions at the
behest of the SBU that will come into effect on Sept. 4 which will
essentially prevent the company from importing alcohol, including
wine, beer and spirits – its core line of business.
In
particular, the punishment forces the wine retailer to obtain a
license for each foreign transaction individually. Currently, the
company operates under a single license.
“We have
around 140 deals every month. Getting individual licenses for each is
simply impossible,” said Maria Oleynik, marketing director of
Bureau of Wines, adding the retailer sells one third of all imported
alcohol in Kyiv.
The
sanctions were levied at the behest of the SBU, according to the
Economy Ministry. Moreover, the company says that the security agency
encouraged it to “solve the problem in person with SBU officers,”
which it considers to be “a sign of corruption,” reads the
company’s statement.
“The
SBU blocks the work of Good Wine. We would rather close the store
than pay a bribe,” reads a billboard placed outside a Good Wine
store in Kyiv’s Pechersk neighborhood.
On
July 8 the company went to court to dispute the sanctions. The
hearing will take place in late August.
Specifically,
the SBU states that in 2011 the company purchased 325,000 excise
labels that were misused. Instead of sending them directly to foreign
wine producers, as prescribed by law, the company sent the labels to
a foreign consolidation company, which aggregates alcoholic products
of various producers.
This,
according to SBU, led to significant, unspecified amounts of taxes
being unpaid.
In
turn, the Bureau of Wines denies the charges, saying all the excise
labels were sent directly to the producers. Moreover, the company
says there could be no loss of taxes anyway because the taxes were
paid in the moment the stamps were purchased.
The
alcohol importer noted that in 2013 it paid Hr 140 million ($17.5
million) in taxes. In an interview to Forbes Ukraine in 2013, the
company’s CEO and co-founder Vladimir Shapovalov said the company
pays “absolutely all the taxes.”
“We
could never think that our work will be stopped by an institution
like SBU, and on such a miserable cause,” reads the company’s
statement.
In
addition, the company has appealed to President Petro Poroshenko,
Prime Minister Arseniy Yatseniuk and a range of other top officials
in its public statement, asking them to take the situation under
personal control.
Taking
notice of the public traction the case has received, SBU head
Valentyn Nalyvaychenko said it is under his personal control to
oversee that “there is no corruption from both sides,” reads the
SBU statement. The SBU also promised to disclose the case materials.
According
to Oleynik of Bureau of Wines, the company hasn’t seen the
materials yet and doesn’t know the details of the accusation.
Good
Wine not alone
Alcohol
beverage retailers Vinfort in Odessa, Arda-Trading, Bayadera-Import
and Akvavit also face similar sanctions that also will go into effect
on Sept. 4, the Kyiv Post has learned. Vinfort is challenging the
allegations and the first court hearing is scheduled for Aug. 19.
The
first Good Wine store opened in December 2007 offering more than
3,000 imports specializing in both old and new world wines at
affordable prices. Its business model has been based on sales volumes
to make a profit thereby keeping prices relatively low.
Kyiv Post editor Olga Rudenko can be reached at [email protected]
