Trade

Feathers fly in Europes battle with Ukrainian chicken boss

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Ukraines top poultry tycoon is stirring up even more tension in the EU by expanding his empire.

Billionaire Yuriy Kosyuk and his chicken business MHP is already a bête noire to EU farmers, who argue that he won a major trade victory against Brussels by exploiting a legal loophole in the EU-Ukraine trade deal to vastly increase exports of chicken breast — the prime cut.

Pressure is mounting for the EU to walk back those trade perks for Ukraine, and to take action against Kosyuks next goal: the international growth of his empire through a €100 million loan from the European Bank for Reconstruction and Development (EBRD).

Green MEP Thomas Waitz said it is incoherent to spend billions of euros subsidizing European farmers through the Common Agricultural Policy to keep them afloat, while at the same time handing money to foreign multinationals that threaten European farms. “Are we talking about capitalism? Or are we talking about betrayal?” he told POLITICO.

“How can we feed them with cheap loans of taxpayers money?” Waitz said, adding that he would be lobbying his national capital, Vienna, to think twice about assenting to the loan.

MHP controls some 370,000 hectares of land in Ukraine, and one of its broiler farms, for example, has 18 million chickens on site at any one time, producing nearly 1,000 tons of meat a day.

AVEC, Europes poultry lobby, said it was “extremely surprised” to learn of the proposed loan. “The use of EU taxpayer money to facilitate the acquisition of an EU poultry company by a Ukrainian company, which has largely benefited from this [chicken breast] loophole, clearly adds to the frustration of EU producers,” it said.

The EBRD is set to decide on May 22 whether to loan MHP the €100 million for its expansion, but EU farmers argue that European taxpayers shouldnt have to foot the bill for a company that doesnt play fair. The EBRD is not an EU institution but all EU member countries, the European Commission and the European Investment Bank are shareholders.

The loan decision will be taken as a majority vote among the banks 67 national shareholders, which also include the Ukraine, the U.S., Australia and Canada.

The “Batman” cut

Kosyuk first came to the attention of the EUs poultry business when MHP found a cunning, completely legal way to bypass high tariffs on EU imports of high-value chicken breast.

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The company discovered it could send chicken breasts with bones still inside — since dubbed the “Batman cut” — and avoid chicken breast tariffs, since this product is different from chicken breast. Meatpackers inside the EU could then simply slice out the bone, and sell the breast without having paid the tariff.

MHP strongly denies such allegations about antibiotics, however. The company spokeswoman said it only uses antibiotics to treat individual animals that are ill

Brussels ultimate solution was to offer Ukraine a provisional deal that not only eliminates this loophole, but also more than doubles the countrys import quota for chicken breast.

“Its a scandal,” said Dutch Liberal MEP Jan Huitema of the provisional Ukraine deal at a Parliament agriculture committee meeting last month, suggesting lawmakers should block the agreement.

The committees chair, Czesław Siekierski from the European Peoples Party, agreed. “Whats going on at the moment is amoral,” he said.

When it comes to support from the EBRD, MHP says Ukrainian banks cannot lend it the sums required.

“Although MHP is in strong financial health, it requires finance to support its ambitious plan to expand, like most other large businesses,” a company spokeswoman said, citing MHPs 10-year relationship with the bank.

EBRD spokesman Anton Usov told POLITICO that the loan is designed to rebalance MHPs finance sheet after its purchase of Slovenian poultry firm Perutnina Ptuj in November, which he said is “fairly normal in banking” and “part of [MHPs] strategy which is designed to expand operations in the EU.”

Supersized superbug concerns

Austrian MEP Waitz also said there are “lots of question marks” surrounding MHPs environmental standards, giving voice to a recurring complaint among EU farmers. Critics argue the firm must, because of its vast size, be using massive amounts of antibiotics in order to protect against stray infections that would decimate its huge flocks, at a time when the EU is trying to combat antimicrobial resistance — the rise in superbugs that are resistant to antibiotics, which is linked to overmedication.

The firm controls some 370,000 hectares of land in Ukraine, and one of its broiler farms, for example, has 18 million chickens on site at any one time, producing nearly 1,000 tons of meat a day.

MHP strongly denies such allegations about antibiotics, however. The company spokeswoman said it only useRead More – Source

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