Ukraine: Privatization of Alcohol Retail Monopoly
Ukraine has abolished the government-run alcohol retail monopoly leading to privatization of alcohol sales in the country.
In parliament, 293 out of the 422 members voted in favor of the law to abolish the Ukrainian alcohol retail monopoly named Ukrspyrt and President Volodymyr Zelensky signed the law recently.
The law provides for the abolition of the state monopoly in production of alcohol as of January 1, 2020, the possibility for businesses to produce alcohol subject to the receipt of a license and the full liberalization of alcohol exports from Ukraine.
The bill also stipulates that only state enterprises authorized by the Cabinet of Ministers will be able to import alcohol before January 1, 2022.
This privatization is another in a series of large-scale privatizations launched by President Zelensky. The reasons stated are that Ukrspyrt has been a corrupt organization and has long been seen as one of the least efficient companies in Ukraine, with tax problems, outdated equipment and poor quality. For the past five years, Ukrspyrt has only had interim CEOs.
Evidently, the solution would have been to make the retail monopoly an efficient one instead of abolishing it. It has been proven that alcohol retail monopolies are effective in alcohol control and also serve customers when maintained and regulated properly. For example, the Swedish alcohol retail monopoly Systembolaget won the title of most trusted institution in Sweden in 2019 in a survey.
An effective alcohol retail monopoly is a central element for all three alcohol policy best buys, recommended by the World Health Organization (WHO) and can help significantly prevent and reduce alcohol harm in a country. One study found that privatizing alcohol retail monopolies would cause serious harm for public heath and safety.
Alcohol burden in Ukraine
©WHO Global Alcohol Status Report 2018
The burden of alcohol harm in Ukraine is obvious as it is placed in the highest end for years of life lost due to alcohol by the WHO. Further, every year alcohol causes over 8000 liver cirrhosis deaths, over 1900 road traffic deaths and over 8000 cancer deaths. For men the situation is even more grave with 11.5% of Ukrainian males suffering an alcohol use disorder.
Despite the apparent harm, Ukraine does not have a comprehensive alcohol control policy. The government needs to take urgent action to formulate and implement a comprehensive alcohol control policy to tackle the heavy burden of alcohol harm impacting the Ukrainian people.