Ukrainian farmers suffer from the actions of trade networks. The UAC Deputy Chairman Mykhailo Sokolov shared his opinion to the “Commentary” what should be done to change the situation.

Ukrainian retail chains are enriched at the expense of agricultural producers, totally violating the terms of payment for the delivered products. Most often, formally, the payment period is set at 60 days, however, in reality, manufacturers often have to wait for funds for already sold goods from 90 to 120 days. According to preliminary estimates, the total debt of supermarkets to Ukrainian agricultural producers is currently about USD 1 billion. Thus, retail chains are credited at the expense of agricultural producers, managing their money and using it to develop their own business.

Unfortunately, this situation is possible because retail chains have a monopoly on the retail market, so they can impose virtually any conditions on manufacturers, because producers do not have too much choice of outlets to refuse to cooperate with them. However, this attitude applies not only to the issue of payment for the goods. Often manufacturers are forced to agree to unnecessary marketing services, to buy shelves on the shelves for their goods, although the network does not take any responsibility for its implementation. Like, suppliers pay only for their services. At the same time, supermarkets promote their own brands and worry about their implementation, rather than selling the products of suppliers, so the competition, of course, can not be fair. Because of this approach to cooperation, funds are laundered from production, and the profits of retail chain owners increase.

The current situation needs to be corrected for a long time and this can be done at the legislative level. Here we can turn to the experience of the European Union, where the appetites of retail chains are limited in favor of national producers. Currently, with the participation of the UAC, the development of the bill is being completed, the purpose of which is to regulate the norms of product suppliers interaction with retail chains. In particular, it is envisaged to establish clear limits of calculation - from 10 to 60 days - depending on the shelf life of products.

At present, for violating the terms of the contract supermarkets’ responsibility is so small that manufacturers do not even want to start litigation. The fine will be too small but it will not fix the situation. At the same time, the new bill provides for serious liability for overdue payment deadlines and state regulation of these processes. Another area in which we also need to move is to simplify and reduce the cost of building new retail space and help to increase the number of independent players in the retail market. This will increase the competition of retailers for suppliers.

Of course, retailers are against such initiatives: it will deprive them of a large amount of working capital, in addition, they will not be able to return them in a short time. However, changes in this direction need to be made, they are long overdue. And we hope that this year we will have some results.