AMCU Declares Ostshem to Be a Monopoly

The Antimonopoly Committee of Ukraine (AMCU) recognized the fact that the Osthem group of the companies owned by Dmitry Firtash (Azot, Severodonetsk Azot Union, Rovnoazot, and NF Trading Ukraine) held a monopoly on the mineral fertilizers market in 2014-2015.

This information was reported by the press service of the All-Ukrainian Agrarian Council (AUAC).

The AMCU has detected that Ostshem unreasonably inflated prices for all types of nitrogen fertilizers "which could not be established under the conditions of significant competition in the market." The decision on this violation is being finalized and will soon be announced on the AMCU meeting.

"According to the documents, the committee decided to impose a fine in the amount of up to 10% of revenue in 2016 on all participants of the Ostshem group and obliged the companies to establish market-level prices," was mentioned in the AMCU investigation materials, provided by the AUAC.

The AMCU noted that the monopolist intentionally reduced the profitability of the factories in order to inflate prices. In particular, according to the committee, in 2015 within one group of economic entities there was an artificial overestimation of the cost of raw materials and, consequently, there was a loss of the manufacturer's costs.

"Having a profit center outside of Ukraine and buying basic raw materials at prices that significantly prevail in the average market prices, the companies can set negative levels of profitability. In such a way they can damage the Ukrainian economy and argue their non-market prices as a factor of unprofitability of production," was mentioned in the AMCU investigation documents with a remark that the solution of these problems lies outside the AMCU competences and requires investigation by Fiscal and Law enforcement agencies.

Let us remind that the Ostchem factories have resumed their work thanks to the orders of the Agrarian Fund.