State-owned enterprise (SOE) Ukrspyrt has halted shipments of spirit to alcohol producers from July 1, 2019, the Ukrvodka association has reported.

"Legitimate businesses should not become hostages of conciliatory procedures between central authorities and the state monopoly. But in fact, for five days, SOE Ukrspyrt has not shipped raw materials for companies producing alcohol. We hope that the Finance Ministry and GFS [the State Fiscal Service] will find a solution to the problem and Ukrspyrt will resume shipments us usual," Head of the Ukrvodka associationVolodymyr Ostapiuk said.

Information on the termination of shipments was also confirmed by an informed source in the market, noting that the introduction of changes to the Tax Code had been known since November last year and, accordingly, it was time to prepare for them, and now alcohol companies are working from stocks.

Earlier Ukrspyrt reported problems with the shipment of ethyl alcohol due to conflict of law.

The SOE said that in connection with the introduction of certain provisions of the Tax Code from July 1, 2019, Ukrspyrt had difficulties with shipping alcohol. According to SOE, Ukrspyrt and alcohol buyers must register the supply of alcohol in the register of invoices, but the registration of the invoice for the export of ethyl alcohol was excluded from the Tax Code (the code only regulates the transportation of vodka and alcoholic beverages). Thus, Ukrspyrt is not able to issue an invoice, and the penalty for the supply of alcohol without proper documentation is 200% of the cost of delivery (at least UAH 15,000).