Ukraine lifted import duties on wine produced in the European Union starting on Jan. 1, according to the Economy Ministry.
It is one of the obligations the country undertook when it signed the association agreement with the EU in 2014. According to the agreement, European producers can start exporting wine to Ukraine for free in 2021. Before that, they paid 0.3-0.4 euros per liter.
Ukrainian wine producers, meanwhile, fear new import regulations because they are already losing their share of the market, according to Kateryna Zvereva, a consultant at the Food and Agriculture Organization of the United Nations. In 2019, Ukraine imported $146.7 million worth of wine and exported 11 times less — only $11.9 million, Zvereva said.
The local production also decreased because of the poor harvest. In 2019, Ukraine harvested half as much grape as in 2018. As a result, in the first half of 2020, the import of wine from Italy, France and Germany increased by 20-30% — to $67.9 million. Ukraine exported only $6.1 million worth of wine during the same period.
Experts said that foreign wine producers threaten the competition on the local market because Ukrainian winemakers don’t receive enough state support. In many European countries, including Spain and France, wine producers pay lower taxes when they start their business and receive investment money from the government. Zvereva said Ukraine should learn from their experience.
Apart from wine, in 2021, Ukraine cancels import duty on other products made in the EU like cheese, nuts and flowers.
The association agreement is meant to boost trade between Ukraine and Europe. While, for EU producers, there opens the Ukrainian market with nearly 40 million potential customers, Ukrainian businesses can trade on one of the world’s largest markets with nearly 500 million consumers. In the long run, as the EU cancels import duties on more products for Ukraine, local Ukrainian exporters can save up to $685 million a year.
