Full-scale war has changed the conditions of cooperation between Ukrainian retailers and foreign partners
Kyiv • UNN
The full-scale war disrupted logistics chains and currency restrictions, forcing foreign suppliers to change the terms of cooperation with Ukrainian retailers, importing a smaller assortment, requiring pre-orders and payment, and abandoning cash on delivery.
The first months of the full-scale war were very shocking for business, and the retail sector was no exception, as all companies, including foreign ones, took an observational position and stopped operations. This was stated in an exclusive commentary to UNN by the Head of the EBA Committees Department, Victoria Kulikova.
According to her, some export-import operations were also suspended, and companies could only ship goods from their warehouses.
However, within a few months, the business began to recover. It is clear that the issues of disrupted supply chains, currency restrictions, etc. did not help the situation. Nevertheless, as for the machinery sector, companies started to resume importing machinery in the summer of 2022,
However, when imports of appliances resumed, Ukrainian retailers faced the fact that foreign suppliers changed their terms of cooperation. For example, they started importing a smaller assortment for storage in Ukraine, or importing goods only after ordering and payment.
At the same time, the EBA representative noted that the members of their particular business association had not had any cases of foreign suppliers refusing to work with Ukraine. However, she did not rule out the possibility that such situations did occur in the market.
This created additional obstacles for Ukrainian retailers, especially in the electronics and home appliances sectors, to operate in the midst of hostilities. Before the outbreak of the full-scale war, all imports of goods were made on a cash on delivery basis.
Context
The start of the full-scale invasion had a profound impact on Ukraine's economy, and businesses faced a number of problems that needed to be addressed quickly. The retail sector, which was heavily dependent on imported goods, was no exception.
Business is business and, of course, everyone is fighting for their own good first and foremost. Foreign companies were no exception, and some of them did not plan to make concessions to their Ukrainian partners and set rather strict conditions for further cooperation. This, in turn, increased the financial costs of Ukrainian retailers, and some of them were unable to overcome these challenges without attracting additional financing, loans and installments.
Some Ukrainian companies have had to resort to forced solutions in order to keep their business alive. For example, Eldorado, a hardware and electronics retailer, initiated an out-of-court reorganization procedure to settle debts to suppliers incurred as a result of the hostilities in Ukraine. At the end of April, the Kyiv Commercial Court approved a pre-trial rehabilitation plan, according to which Eldorado is guaranteed to repay 30% of the debt within five years, 30% is subject to write-off and the remaining 40% will be received by the creditors after compensation for the damage caused by Russia.
