MHP reacts to claims about bypassing EU import restrictions
Peter Vesseur, general secretary of the Dutch Poultry Processing Association and Łukasz Dominiak, director general of Poland’s National Poultry Council, speaking with newspaper Politico, raised concerns that MHP had found a way to bypass EU import restrictions under the terms of the trading deal.
Citing the two European poultry industry officials, the publication claimed MHP had bought poultry processing facilities in Europe in order to supply them with in-bone chicken breasts from Ukraine, which are free of duty. At the European plants, the bone is sliced out and MHP can then sell boneless chicken breast – a product with a higher added value, they claimed. In this way, MHP has managed to increase exports of chicken breasts containing the wing bone to the EU from 3,500 tonnes (t) to 27,000t, and is believed to have paid less duty than if it had exported boneless chicken breasts from its facilities in Ukraine, claimed the report.
“MHP is a supplier of chicken to the EU, along with the other certified companies in Ukraine,” Sobotyuk commented. “We believe this issue fully falls within [the remit of] negotiations between the representatives [of regulatory authorities] of Ukraine and the EU, and doesn’t affect the competency of any company in Ukraine,” she added.
As such, it would be not right to issue any further comment on those claims, added Sobotyuk.
Further increase in supplies on the way
The Ukraine poultry manufacturer opened its first European processing plant in the Netherlands in 2016, while the second one, in Slovakia, began operating in 2017. MHP has reportedly considered acquiring a third business in Europe by buying Polish firm Exdrob. However, there have been no further developments on that deal as yet.
Speaking in September 2017, Sobotyuk said while the company’s plant in the Netherlands was operating at full capacity, there were plans to increase production at the Slovakian facility following the opening of the second stage of MHP’s Vinnytsia poultry farm in Ukraine.
MHP launched a second line at the Vinnytsia poultry farm in early July 2018, investing $300 million in the venture. The company said that at, present, production at the farm was around 280,000 tonnes (t) of poultry a year. By 2020 it was expected to reach 560,000t, added the company.
In 2017, MHP exported 220,000t of chicken, with Europe accounting for 30% of the company’s foreign sales, or 64,000t, MHP said in statement on 18 July. This year, MHP has seen its exports rise further, to 133,600t in the first half of the year, 9% higher on the same period in 2017.
The company has not provided any further details on its sales in the first half of the year. However, speaking to Politico, John Rich, an MHP board member, estimated the current volume of the company’s supplies to Europe at 70-80,000t per year, a noticeably higher level than its exports in 2017.
