Losses exceeding one billion hryvnia: thousands of tons of coffee are smuggled into Ukraine every year
17 February 10:16
The coffee market in Ukraine remains one of the most popular consumer goods segments, but a significant part of it remains in the shadows.
This was stated on social media by Danylo Getmantsev, a member of the Ukrainian parliament and chairman of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, according to "Komersant Ukrainian".
According to market participants’ estimates, about 35-40% of coffee in Ukraine is sold outside of official records. While the total consumption of coffee in our country is approximately 75-90 thousand tons per year, official import and production figures are significantly lower.
According to Getmantsev, coffee imports to Ukraine slightly exceed 40,000 tons per year. At the same time, domestic production of roasted coffee with caffeine is only 8,500–9,000 tons per year. Even at maximum estimates, these volumes do not cover actual consumption, which indicates a significant segment of illegal circulation.
This imbalance between real demand and declared import and production volumes means that a significant portion of the product enters the market outside of customs and tax control. According to preliminary estimates, losses to the state budget due to the shadow economy in this segment may exceed 1 billion hryvnia annually.
In addition to direct financial losses, the problem has broader implications. The shadow market undermines fair competition, creates unequal conditions for legal businesses, and reduces trust in state institutions. Companies that pay taxes and operate openly find themselves at a disadvantage compared to those that avoid fiscal obligations.
In this regard, Danylo Getmantsev appealed to the Economic Security Bureau of Ukraine, the State Customs Service of Ukraine, and the State Tax Service of Ukraine to take urgent and comprehensive measures to de-shadow the coffee market. This involves strengthening control over imports, analyzing domestic production and sales, and identifying tax evasion schemes.
According to the head of the relevant committee, only a systematic approach and coordination between regulatory authorities will minimize the shadow segment, ensure fair competition, and increase budget revenues. In the context of martial law and a significant burden on public finances, the issue of de-shadowing the economy is particularly relevant.
Contraband coffee in Ukraine
In August last year, Getmantsev stated that about 3,000 tons of illegal coffee enters Ukraine every year, which is approximately every third ton of total imports.
Some of the product is imported under the guise of chicory and then either sold for cash or repackaged under international brands and also sold for cash.
Illegal coffee enters not only markets and large retail chains, but also through numerous sole proprietorships operating in food retail, Getmantsev emphasized.
