Procter&Gamble says it is doing everything it can to keep its products in circulation in Ukraine following last week's official revocation of state certificates for about half of the brand names it sells here.
Qaisar Shareef, general manger of Procter&Gamble Ukraine, said his company has applied to the State Standards Committee in order to continue selling tons of its goods currently sitting in Ukrainian warehouses. To this end, he said the U.S.-based firm had also requested permission for Ukrainian officials to inspect foreign factories that make company products imported into Ukraine.
'We put in all the applications,' he said. 'We are just waiting for the certificates now.'
Company brands, including such well-known products as Tide and Ariel laundry detergents and Pantene and Head and Shoulders shampoos, were ordered off the market March 3. Shareef said the State Standards Committee acted because it judged Procter&Gamble too slow in arranging access for Ukrainian officials to foreign factories where company products are made.
'That was the only reason quoted in their statement,' said Shareef. 'There was no mention of anything being wrong with our products.'
According to Shareef, foreign businesses operating in Ukraine can take two approaches to certifying imported retail goods. One is to test and approve every truckload of goods that crosses the border. The other is to obtain certification that applies to all products imported during a fixed period.
This latter form of certification is issued when a company agrees to allow Ukrainian officials to inspect foreign factories producing the relevant goods.
'Ukraine gives you only two options,' he said. 'For a company that has a high volume of business, certifying each truck isn't practical.'
Procter&Gamble received certification last June, and had one year to allow Ukrainian inspectors access to eight factories in seven countries, said Shareef. But he said various problems at the factories delayed the inspections. Shareef said the State Standards Committee did not accept his explanation for the delays.
Shareef could not say how much his company was losing in revenue by not having the certificates.
'We're not able to do business on half of our products. Whether [this will have a] big or small impact depends upon how long it takes for us to get back in business,' he said. Shareef fears that if matters cannot be resolved soon, the void of Procter& Gamble products on the market could lead to large scale black market importing.
'Consumers want the products and we aren't able to supply them until we have the certificates,' he said. 'Our inability to supply the product might increase smuggling.' Procter&Gamble has run afoul of the State Standards Committee in recent months over its cleaning powder and advertising of its detergents. The company was also cited for allegedly paying a bogus laboratory for product certification.
Several other leading international corporations, including McDonald's, have also run into difficulty with the State Standard's Committee's regulations.
Committee officials sought to address the concern and confusion of foreign businesses at the American Chamber of Commerce on Wednesday.
According to chamber Director Mark Kalenak, the officials discussed technical barriers to trade and investment into Ukraine, and expressed interest in continuing to meet with American officials and foreign business representatives to help clarify issues.
The officials also asked chamber members for help in negotiating certification for Ukrainian goods exported to the United States.
One businessman who attended the session, and asked not to be named, said that the meeting was less than productive. 'There was not a great deal of information exchanged. … There was only one question asked,' he said. 'People are afraid. … Definitely people don't want to get on these guys' bad side.'
