Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade

The processing in EU member states of poultry birds raised and slaughtered in the Ukraine raises both important rules of origin issues in the EU poultry meat export trade with ACP countries (particularly South Africa) and important SPS control concerns (given the initial origin of the birds is being disguised through the cutting and packaging operations carried out in EU member states). This expanding trade suggests a need for stricter proof of origin documentation requirements on poultry meat imports from the EU both on SPS and rules of origin grounds. The rules of origin dimension is particularly important where reciprocal preferential trade agreements covering poultry meat are under implementation (e.g. under the SADC-EU EPA).

According to figures in the EC’s 14th December 2017 review of the EU Market Situation for Poultry, imports of poultry meat from Ukraine amounted to 48,083 tonnes in 2016, up from a mere 210 tonnes in 2013.  This has been followed by a further 67% increase in the first 10 months of 2017 (compared to the first 10 months of 2016). This took the total amount of poultry meat imported from the Ukraine in the first ten months of 2017 to 65,665 tonnes (2).

EU Poultry meat imports from Ukraine (Tonnes and % share total EU imports)

2013 2014 2015 2016 Jan-Oct 2017 Increase from Jan-Oct 2016
Ukraine 276 19958 42,513 48,083 65,665 +67%
Total EU imports 807,274 845,743 874,937 902,123 680,853 -10.9%
% EU total 0.0% 2.4% 4.9% 5.3% 9.7%

Source: EU market situation for Poultry, 14 December 2017,

This trade is significant since the largest poultry producer in the Ukraine, MHP, has poultry processing facilities in Hungary (4) Slovakia (3) and the Netherlands (4) and has recently invested in Poland (5).

According to a statement by a Dutch poultry producer’s representative, MHP is importing both breast meat (4) and whole poultry birds from its production facilities in the Ukraine for processing at its Dutch factories.  Since the cutting of these imports takes  place at the MHP facility in the Netherlands this allows the poultry parts derived from these birds to be labelled ‘Dutch’ when trading within the EU and into third country markets (8).  According to USDA report Dutch poultry producers are ‘unhappy about “Made in Netherlands” label that will be on chicken products’, derived from poultry raised and slaughtered in the Ukraine. They have accused MHP of ‘piggybacking’ on the reputation of the Dutch poultry’ industry, despite the discrepancy in the production standards applied in the Ukraine compared to the Dutch poultry production standards (6).

The trade in whole birds also enables MHP to make use of underutilized quotas for the import of whole birds into the EU.

Despite these growing export volumes and the annual increase in the EU’s country specific poultry meat import quota allocated to the Ukraine the CEO of MHP, Yuriy Kosyuk, has complained about the restrictive nature of EU import quotas and the punitive level of out-of-quota duties charged. He has sought to argue it would be reasonable for the Ukraine to have a quota for the EU market of around 250,000-300,000 tonnes.  This needs to be seen against the backdrop of the major expansion MHPs poultry production which is underway and the company’s growing focus on export markets (3).

However it should be noted that in 2016 Ukraine also faced several outbreaks of HPAI, which saw the EU market temporarily closed. There are long standing complaints the MHPs facilities in the Ukraine do not meet EU production standards (9, 10). A situation which also arises in regard to the stringency of national SPS controls in Ukraine.

Comment and Analysis

Against the background of the growing level of EU imports of poultry meat from the Ukraine and the investments of the Ukrainian poultry producer MHP in processing facilities in the EU, important questions arise in regard to the ‘origin’ of EU poultry meat exports to sub-Saharan African countries. Concerns also arise in regard the rigour with which SPS control regimes are applied to poultry production in the Ukraine in a context where Ukrainian poultry parts could find their way into the EU’s export trade with ACP countries.

In terms of the rules of origin issue, it is perfectly conceivable that Dutch, Polish and Hungarian poultry meat exported to South Africa and other sub-Saharan African countries may be derived from poultry birds raised and slaughtered in the Ukraine. Where poultry meat exported to South Africa is derived from birds not raised and slaughtered in the EU, should exports do not ‘originate’ in an EU member state and hence should not be eligible for the preferential tariff treatment accorded EU originating goods. Indeed, imports of meat derived from chickens raised and slaughtered outside of the EU should be subject to the same duties and controls as imports originating in any third country which trades with South Africa on an MFN basis.

In terms of SPS issues, there are well established weaknesses in the national SPS control service in Ukraine, with exports of meat from birds raised and slaughtered in the Ukraine potentially carrying additional SPS risks. This however is disguised if the meat from these birds is labelled Dutch, Polish Slovakian or Hungarian as a result of meat preparation activities undertaken in these EU member states.

This growing EU poultry meat import trade from the Ukraine suggests a need to apply stricter rules of origin documentation requirements on poultry meat imports from the EU, where these taken place under preferential trade agreements. This would appear to require a particular focus on securing proof of origin of the birds from which the poultry meat imports are derived in EU member states where Ukrainian poultry companies such as MHP have processing facilities. However, since individual EU member states cannot be treated differently, such stricter origin documentation requirements would need to be applied to all poultry meat imports from the EU.

This would appear to be essential both to ensure that only poultry meat which originates from EU produced birds is accorded preferential tariff treatment and to ensure that proper SPS monitoring can be carried out to minimise the risk of transmission of the HPAI virus.

South African Poultry Meat Imports From Selected EU Member States 2013-2016

2013 2014 2015 2016 % change 13-16
EU 151,075 195,256 209,971 260,677 +72.5%
Netherlands 64,833 75,498 78,164 111,919 +72.6%
% share EU total 42.9% 38.7% 37.2% 42.9%
Poland 20 26 4,944 18,915.4%
% share EU total 0.01% 0.01% 0% 1.9%
Hungary 3,690 8,628 10,197 12,726 +244.9%
% share EU total 2.4% 4.4% 4.9% 4.9%

(1) EC, Market Access Data Base
(2) EC, ‘EU Market Situation for Poultry’, 14 December 2017
(3), ‘MHP expands Ukraine poultry farm to fuel export program’, 24 November 2017
(4), ‘The Netherlands is MHP’s gateway to Europe’, 25 July 2017
(5), ‘Ukrainian-giant-to-take-over-Polish-company’, 25 September 2017
(6) USDA, ‘Ukraine Poultry and Products Annual Report’, GAIN Report Number UP1641, 31 August 2016
(7), ‘Ukraine poultry company sees strong export growth’, 25 April 2017
(8), ‘Unfair to our farmers — Dutch Poultry Producers Rally Against MHP’, 23 June 2016
(9) Compassion in World Farming, ‘Following the money trails that finance factory farming’, Evidence report, Compassion in World Farming / May 2014
(10) SOMO, ‘Chicken Run’, September 2015