Today, a number of public initiatives, representatives of the Ukrspirt state-owned enterprise trade union, and activists from volunteer military units picketed the Prosecutor General's Office of Ukraine and the State Fiscal Service office. Their demand is the lustration of Chief Prosecutor Vitaliy Yarema and Deputy Head of the State Fiscal Service of Ukraine Volodymyr Khomenko.
According to the protesters, by blocking the economic activities of the state-owned enterprise Ukrspirt and persecuting its top management, including the director of the state-owned enterprise, Mykhailo Labutin, General Fiscal Khomenko and Deputy Prosecutor General Viktor Shokin, they are deliberately bankrupting a profitable enterprise.
The company's accounts are currently frozen, tax authorities are levying new fines, and Ukrspirt's debts to its raw material suppliers are mounting. These include hundreds of farmers who supply grain to the distilleries. They recently staged their own protest, protesting the tax authorities' actions.
According to Mykhailo Labutin, the state-owned enterprise Ukrspirt is a super-profitable enterprise for the Ukrainian budget. "Based on the results of the second and third quarters of this year, Ukrspirt generated a net profit of UAH 88900000 million (in the second and third quarters of 2013, it was UAH 15800000 million), meaning budget revenues have increased more than 11-fold. And that's without taking into account the Luhansk and Donetsk regions and Crimea, which consume the lion's share of alcoholic beverages!" Bankrupting such an enterprise would be like killing the goose that lays the golden eggs, says the director of Ukrspirt.
However, there is some logic to the tax authorities' actions. Media reports have already indicated that the Ministry of Finance, represented by its head, Oleksandr Shlapak, is lobbying for three main desires of vodka producers: the liquidation of Ukrspirt, the introduction of maximum prices for alcohol, and an increase in the minimum price for vodka. The government, influenced by the lobbying efforts of private vodka corporations, has long been mulling the idea of dividing Ukrspirt into separate entities and privatizing them. This concerns 29 operating distilleries.
The Ministry of Finance has already drafted a Cabinet resolution to liquidate the state-owned enterprise "Ukrspirt" and place all existing distilleries under the direct control of the Ministry of Agrarian Policy and Food (Ministry of Agriculture and Food). However, the Ministry will only have limited oversight of the enterprises—each distillery will be able to set its own selling prices for alcohol.
The liquidation of Ukrspirt also plays into the hands of Yanukovych's former "overseers" who previously oversaw the industry. The names of Oleksiy Chebotarev and Yuriy Ivanyushchenko ("Yura Yenakievsky") are still being mentioned in the context of attempts to reinstate Ukrspirt in schemes involving unaccounted alcohol and counterfeit vodka production. Rumor has it that the aforementioned Deputy Head of the State Fiscal Service, Volodymyr Khomenko, is also involved in this business.
What will the bankruptcy and liquidation of Ukrspirt lead to? The state will lose its monopoly on alcohol production and a significant source of revenue for the state budget. According to Mykhailo Labutin, if the government, instead of killing the industry, restores order, it could generate UAH 300 million annually from alcohol taxes and UAH 1,4 billion from excise taxes. Arseniy Yatsenyuk's government, however, is voluntarily rejecting these funds, which Ukrspirt could earn for the state. And this is happening despite the fact that the country is on the brink of default, social benefits are being cut, and social obligations are being slashed.
The answer may lie in the fact that the liquidation of Ukrspirt may have converged between the interests of tax officials (or rather, some of their leaders – Bilous and Khomenko), "overseers" (Chebotarev), and major vodka producers (for example, the aforementioned owner of Khortytsia, Chernyak), as well as the Cabinet of Ministers, who are actually orchestrating it all. Everyone stands to profit… except the state.
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