Why Ukrainian butter is rising in price and how to avoid buying counterfeit: expert explains
6 August 2025 19:13
ANALYSIS FROM 
The average market price of butter in Ukraine in August 2025 is approximately UAH 107.2 per 200 g, which is stable after the July decline from the previous level of UAH 117.25.
In its July 2025 Inflation Report, the NBU notes that Ukrainian dairy prices (including butter) are 20-25% higher than in Poland. Although some products are cheaper, the structure and internal costs make our butter less competitive on the export market. In Poland, the introduction of reduced (and later zero) VAT stimulated consumption and development of the industry, which is not the case in Ukraine.
What is happening with butter prices on the Ukrainian food market and what determines the fluctuations in prices, found out
According to the State Statistics Service , the lowest regional prices for butter (200 g) were recorded in Poltava (UAH 95) and Kharkiv (UAH 98.18) regions. Instead, Kyiv, Chernivtsi, and Kherson show higher prices, ranging from UAH 113 to 116.8. Average monthly fluctuations, in particular from UAH 107.4 to UAH 107.2 (-0.2%), indicate relative price stability during the summer season.
Olena Zhupanis, Deputy Director General of the Association of Milk Producers, who was interviewed by
In 2011, the VAT rate in Poland was 23%. Therefore, it was decided to reduce it from 23% to 5%. It was in effect for 10 years. During this period, consumption of dairy products in Poland increased by 20%. “Seeing such an increase in consumption, the Polish government set a zero VAT rate,” says Żupanis.
“From February 1, 2022, to March 31, 2024, the rate was zero. But after that, official Warsaw raised it to 5%. This means that the difference in butter prices in Ukraine and Poland is due to different VAT rates. After all, in Ukraine it is 15%.
In addition, we should not forget about the retailer’s markup.
The deputy director general of the Association of Milk Producers also says that the rise in butter prices in Ukraine is related to the issue of raw materials.
“Now in Poland, milk is 30% more expensive than in Ukraine. But there are other factors besides the VAT rate. First of all, we are talking about high production costs in Ukraine. Now we have expensive electricity and gas. Because the government is trying to keep the price of gas for the population at a stable level, the industry suffers, and, of course, this all affects the prices of finished products,” emphasized Olena Zhupanis.
The expert added that such a scheme of price increases applies not only to milk but also to other food products. This is because the price for gas for factories today is over UAH 30 thousand per thousand cubic meters. It has outpaced electricity tariffs in terms of price increase.
In addition, Ukrainian factories have a smaller production scale than Polish ones. Therefore, the cost of producing one kilogram of butter in Ukraine is higher than in neighboring Poland.
It should also be noted that our processing industry, unfortunately, lags behind the Polish one in terms of modernization and the introduction of more innovative technological processes. After joining the European Union, the Polish industry received serious government support and access to cheap financial resources, and as a result, their dairy processing is more technologically advanced than in Ukraine. And all of this is reflected in the price of the product,” summarized Zupanis.
Counterfeit and VAT: why Ukrainians pay more for butter
As we discussed with the expert above, the price of butter in Ukraine is influenced by a number of factors. Among them:
1. VAT rate. The Ukrainian VAT on dairy products is 15%, which affects the final price, while in Poland this figure remains at 5%.
2. High production costs. Energy is much more expensive in Ukraine: the cost of gas for industry is over UAH 30,000 per thousand cubic meters and is growing rapidly; electricity is also more expensive than in the EU, which increases the cost of dairy products.
3. Smaller production scale. Ukrainian processing plants have lower processing capacity and outdated technologies, which increases the cost of producing a unit of butter.
4. Technological lag. Polish companies have access to state support and cheap loans after joining the EU, which allowed them to modernize production and optimize logistics.
5. Export incentives. The EU’s introduction of quotas on imports of Ukrainian butter led to increased demand and rapid export growth, which was reflected in domestic prices: in June, raw materials were exported for $7,300-7,500 per ton, which stimulated domestic demand and prices.
A significant percentage of butter in Ukraine is counterfeit: what consumers need to know
According to the Union of Dairy Enterprises in Ukraine, up to 20% of butter in Ukraine is counterfeit. Ukrainians find themselves in a situation where they see cream on the product label, but in reality, the butter contains vegetable fats.
If the butter contains milk fat substitute, palm oil, or other types of oils, it is more correct to talk about a spread rather than butter. Unfortunately, butter falsification is very common in Ukraine. Dishonest entrepreneurs take advantage of the situation with the price of the product. They are trying to make money on ordinary Ukrainians,” explained Olena Zhupanis, Deputy Director General of the Association of Milk Producers.
How to buy natural butter and avoid buying a fake: expert explains
In the commentary
- butter from the refrigerator in the supermarket should be hard. A soft structure indicates vegetable fats in the composition, because vegetable fats do not crystallize as well as animal fats;
- at home, put a piece of butter you bought in warm water. The butter will dissolve and make the water cloudy. Vegetable fats will form a film on the water;
- high-quality butter cannot cost 50-60 hryvnias per kilogram. After all, the average purchase price of milk including VAT today is about UAH 20.
Thus, without fundamental changes, such as VAT reforms, energy efficiency, and support for the industry, domestic prices will remain significantly higher than in the EU. Ukrainian producers should modernize production, optimize logistics, and reduce dependence on imported energy and quotations.
In the short term, government initiatives to reduce production costs and support for local brands may lead to lower final prices. But without structural reforms, production costs will remain relatively high.
Author – Yaroslava Lubiana
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