Research on production and distribution of poultry meat in Ukraine

Abstract

The purpose of this article is to investigate the trends in production and distribution of poultry meat in Ukraine. It is shown that the characteristics of the product itself have a significant effect on demand. In terms of price and quality, as well as the low consumer demand of the population of Ukraine, poultry has been a leading market player in recent years. Over the past ten years, chicken consumption has increased by 16% with a significant decline in population. The share of poultry meat in the structure of meat production in Ukraine was 53.5% in 2018, up 12% from 10 years ago. It has been researched that the market of poultry meat, unlike the markets of other types of livestock products, is characterized by a significant contribution of agricultural enterprises, which in 2018 produced more than 85% of all poultry meat produced. It is determined that the broiler meat market in Ukraine is highly concentrated. The market share of the seven largest poultry companies in 2018 was 85%, and the industry leader PJSC Myronovsky Khliboproduct (MHP) is about 57% of the total production in the agricultural enterprises segment. Most manufacturers continue to increase their production capacity, which further increases market concentration and competition. The structure of distribution of production of poultry enterprises on the example of MHP is considered. The company sells its products through franchise network, supermarkets, retail chains, exports and uses other distribution channels. It has been researched that branding is an important component of successful distribution in the poultry market. MHP were the first who brand fresh chicken meat. Existing poultry brands are positioned as a natural and environmentally friendly product. The poultry meat market in Ukraine has been shown to be saturated. Over the past 10 years, production volumes have increased by almost 60% and consumption by only 6%. It is the export of broiler meat today that is the main impetus to increase its production in Ukraine. Over the past 10 years, exports of poultry meat have been found to have increased almost 40-fold and continue to grow strongly in 2019. The main importers of Ukrainian poultry meat were the Netherlands, Slovakia and Saudi Arabia. In addition, in 2018, Ukraine became the leader among suppliers of chicken to Europe, increasing poultry meat exports to the EU by 57%. It describes how exporters manage to increase their exports. It has been determined that in order to support exports in Ukraine, it is advisable to set up an export-credit agency that insures risks and works to reduce the cost of export credits. It is also important to create an effective food safety and quality system in line with EU standards. It has been shown that along with exports, poultry meat imports are also growing, mainly low-grade products that are fully used for the production of meat and sausages product. It has been researched that the growth of export of poultry meat from Ukraine has a negative impact on prices for these products in the domestic market.