Orla Donohoe, Food and Beverages Division, Bord Bia – Irish Food Board

All eyes were on Kiev recently as the capital city of Ukraine hosted a rather dazzling Eurovision Song Contest. With recent reforms and closer ties with the West, Ukraine is gradually becoming an attractive, albeit still challenging, place to do business in. A Deep and Comprehensive Free Trade Agreement (DCFTA) was recently agreed with the EU (originally reported here). The DCFTA is an agreement which opens markets through the progressive removal or customs duties and restrictions and lays the groundwork for the gradual alignment of norms and standards, including food safety.

Ukraine is the second largest country in Europe and geographically at a crossroads between Europe and Asia. According to the USDA’s Exporter Guide for Ukraine, the consumer structure is uneven in this market. Currency devaluation has resulted in a higher proportion of household budget being spent on food. About 3.5m consumers (out of a population of 42m), are regarded as affluent however and are potential customers for high-value added consumer products.

One of Ukraine’s largest retail businesses is Fozzy Group which operates a number of formats from hard discounters to premium retail with 600 outlets country wide. Le Silpo (Kiev outlet pictured) is the company’s premium retail brand, which stocks a range of gourmet and speciality products from around the world.

Bord Bia is currently exploring the potential of the Ukrainian market for Irish food and drink exporters. The retail market is changing with structural changes in consumption leading to greater demand for value added food products. As in most of the developed world, consumers in the larger urban centres are more demanding and sophisticated. While food and drink exports from Ireland to Ukraine are currently modest at €4m p.a. there is good opportunity for suppliers over the medium term particularly in the premium packaged goods end of the market.