Companies related to ex-President Petro Poroshenko’s son Oleksiy and his confectionary Roshen have been accused of monopolizing the treacle market.
The Anti-Monopoly Committee of Ukraine, or AMCU, has opened a case against companies tied with Roshen, country’s largest confectionery corporation, investigating possible abuse of a dominant position on the market for a confectionery sweetener, treacle, the agency stated on Aug. 21.
The investigators say there are “clear signs of the dominant position” of Roshen-related companies on this market, taking up over 35% in 2018–2019.
“We conducted our internal expert analysis and there are signs of violations and reasons to believe that there is a monopoly,” said Ihor Kustovsky, investigation director for the industrial, retail and pharma sectors at the AMCU.
The authorities opened a case against two companies registered in Luxembourg and integrated into Roshen Group. These companies supplied the sweetener for the Roshen group and partly sold it to other market players in Ukraine.
According to AMCU, while selling the sweetener, these companies could set different prices for it under different conditions for different confectionary firms — a sign of a monopolist.
One of the top 30 largest confectionery manufacturers globally, Roshen denied the accusations and stated that it “did not receive any official notification about the initiation of the case.” The AMCU authorities claim the opposite.
Roshen produces around 300,000 tons of confectionery products annually and the sweetener, a thick syrup made of crushed sugar cane or sugar beets, is one of the main components used in the production of caramel, marshmallows, candies and marmalade.
Kustovsky said that, although none of the eight Roshen confectionery factories may be directly related to dominating the treacle market, they have common final beneficiary — Oleksiy Poroshenko, eldest son of Petro Poroshenko.
The younger Poroshenko took over the confectionery — founded in 1996 and owned by his father — in November 2019, the same year when his companies raised the prices for the sweetener for all market players after the imposition of a ban on importing this product from Russia.
Kustovsky from the AMCU said that, when market players started to complain about the monopoly, the agency decided to investigate the situation.
It’s difficult for him to give any forecasts on how long it will take to close this case. The main reason is, this year, companies accused of monopolistic positions have started postponing any responses to AMCU due to the country’s quarantine measures to prevent the spread of COVID-19.
If proved, Roshen-related companies will be fined, the amount of which will depend on the time and duration of the violation.
“Currently, however, it’s too early to talk about sanctions against those companies,” said Kustovsky.
