Mironivsky Hliboproduct

Mironivsky Hliboproduct

Type	Public company
Industry	Agriculture
Founded	1998
Headquarters	Kyiv , Ukraine
Area served	World Wide
Key people	Yuriy Kosiuk (Founder, CEO)
Website	http://www.mhp.com.ua/en

The Mironivsky Hliboproduct (Ukrainian: Миронівський хлібопродукт; Myronivka Bread-Produce, often abbreviated as MHP) is the Ukraine's largest agricultural produce company, based in the small city of Myronivka, Kyiv Oblast (hence its name), with over 50% of the country's "industrially produced poultry".^[1]

The CEO is billionaire Yuriy Kosiuk.^[2][3]

Among its better known brands is its chicken "Nasha Ryaba" (Our Ryaba, which is a traditional name of a chicken in East Slavic fairy tales^[4])^[5] which is produced at Myronivka chicken farm in Stepantsi village, Cherkasy Raion, Cherkasy Oblast. International brands include "Qualiko", "Ukrainian chicken", "Assilah", "Sultanah", and "Chateau Galicia".

MHP posted net profit in 2017 was $230 million, which was 3.3 times up from 2016.^[6]

In July 2019, the Serbian Commission for Protection of Competition has allowed Myronivsky Hliboproduct (MHP) to acquire Perutnina Ptuj (Slovenia).^[7]

Impacts of MHP operations

As one of the biggest agricultural producer, MHP has its facilities in Vinnytsya, Cherkasy, Dnipropetrovska, Ivano-Frankivska oblasts in Ukraine and in the EU in Slovenia and the Netherlands. The most adverse impacts associated with the company's facilities work are smell of manure, air, water, and soil pollution, as well as negative impacts of company's traffic on the local areas. ^[8]

Water pollution and risks of disappearance of water

One of the MHP facilities are located near Kaniv, Cherkasy Oblast. According to the permit received by MHP, the company is using 9 artesian wells located on the territory of Stepanetska village council of Cherkasy Raion and is using around 6600 м3 of water daily.^[8] Water utilized and contaminated during the production process flows to Rosava river and then to Ros river where Ros ichthyological reserve is located protected by the state. Moreover, using artesian water leads to radical decrease of clean water in Kaniv, Cherkasy Oblast, and water shortage. Villagers claim there is no tap water at all.^[8] Research of MHP with Cherkasy State Technological University found no pollution caused by MHP in the river near its operations in Cherkasy oblast.^[9] Cherkasy University has a history of cooperation with MHP.^[10]

Waste and air pollution

The unusual impact that a newcomer observes while first visiting the places near MHP poultry production facilities are the smell of chicken manure. MHP solves the issue of manure utilization by storing the manure on the ground and on the fields. When it rains the manure flows into the rivers, contaminates and soil and the ecosystem.^[11]

Human rights abuses

MHP uses threats and intimidations against activists opposing their operations' harmful environmental and social impacts ^[12][13]

Tax avoidance in Ukraine

MHP claims to be one of the biggest tax payers in Ukraine that transfer more VAT than any other company in Ukraine.^[14] However, MHP actually does not pay the VAT, since VAT is by definition a tax paid by the end consumer. At the same time, MHP that received 30% of all subsidies for agriculture from Ukrainian budget is the biggest recipient of state subsidies allocated for agriculture in 2018. Moreover, analyses claim that MHP manages to get more subsidies from Ukrainian state budget than they paid in taxes in 2018. So, while MHP transferred to state budget in taxes UAH 4.2 billion UAH, they obtained UAH 1.4 bln state subsidies and UAH 3.3 billion of VAT refund on export^[15]  

In June 2019 Antimonopoly Committee of Ukraine started investigations of MHP accusing them of implementing a restrictive trade policy in relation to distributors, sub-distributors, and partners.^[16]

Tax avoidance through registering companies abroad

Despite large government subsidies, MHP manages to hide its capital in tax heavens abroad. According to SOMO research, a number of MHP's subsidiaries were registered in tax heavens in Luxemburg 2006 through 2017 and since 2017 moved to Cyprus.^[17] According to their research, most of MHP's actives are in offshores which allows the company to avoid taxes at home. The company does not give explanations about objectives of setting up a number of these offshore companies but their creation in the first place is a red flag for tax avoidance at home.

Political Connections of MHP in Ukraine

Significant government support to MHP business and disregard to its tax avoidance is not a surprise due to political connections of Yuriy Kosiuk, owner of MHP. Mr. Kosiuk served as a Deputy Head of the Presidential Administration of Petro Poroshenko responsible for military and security issues in 2014. A number of MPs in the agrarian committee of Verkhovna Rada are connected with Mr. Kosiuk. For example, Mykola Kucher, before becoming an MP served as a head of the department at MHP, Oleksandr Bakumenko (VIII convocation) who admitted Kosiuk is his “close friend”.^[18] MHP is also tied to a Alexey Amelyanenko who set up the scheme to flush the state funds out of the "Ukrgasbank" and used to be a shareholder of MHP and a partner in Mr. Kosiuk's business.^[19] Political analyst Ruslan Bortnik, director of the Ukrainian Institute for Policy Analysis and Management, described Kosyuk as a “person from the financial and administrative circle of president's close associates who can influence the governmental appointments” ^[20]

Support of International Finance Institutions to MHP

MHP is a client of large international finance institutions, namely EBRD, EIB, IFC. These international institutions use public money of their member countries to stimulate economy of developing countries like Ukraine by providing loans to sustainable businesses. These institutions have their policies requiring their finding to comply with social, environmental, transparency, and other norms. In 2019 EBRD announced that they stopped funding MHP business after MHP used a loophole in the EU-Ukraine Association agreement and exporting chicken filet beyond adopted quotas.^[21] In 2018, communities affected by MHP's Vinnytsia poultry farm filed a complaint with the IFC^[22] and the EBRD.^[23] The complaint has led to an ongoing mediation process between the parties to the conflict, which is mostly confidential.^[17]

References[]

External links[]

• Alex Morgun (20 July 2015). "Nasha Ryaba (MHP's brand) boosted chicken exports by 47% in 2015". UkrAgroConsult. Retrieved 14 May 2018.

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