Ukraine’s top 100 brands revealed in new ranking

Ukraine’s most valuable brand is a drink, and it isn’t vodka.

Morshinska, a bottled water brand, came first in the ranking of the top-100 most valuable brands in Ukraine compiled by MPP Consulting and published by Novoe Vremya magazine in its Nov. 17 issue.

The brands were evaluated on the basis of the companies’ financial results, how widely the product is distributed, production technology, and the investment attractiveness of the field.

Morshinska has been topping MPP Consulting’s ranking of Ukrainian brands since 2013, when it unseated the previous leader – Nemiroff vodka company. In the 2017 ranking, Nemiroff came fourth after Sandora juice and Roshen chocolate.

Morshinska’s brand was valued at $507 million. That’s roughly the price that the whole holding, IDS Group Ukraine, which owns several Ukrainian bottled water brands, was reported to be valued at in 2013 when it was sold to Russia’s Alfa Group, its current owner.

Ukrainian Forbes magazine, citing deal insiders, reported that the company was valued at about $500 million. The company’s other brand, Mirgorodska water, is ranked as No. 20.

10 most valuable brands in Ukraine (according to MPP Consulting)

For the full list of Top 100 Most Valuable Brands, see the Nov. 17 issue of the Novoe Vremya magazine.

Ukraine’s second most-valuable brand, according to the ranking, is Sandora, a packaged juice brand, valued at $312 million. Like the Russian-owned Morshinska, Sandora isn’t Ukrainian either. In 2007 the company was acquired by PepsiCo. Back then, PepsiCo paid $842 million for an 80-percent stake in Sandora.

The third most valuable brand in Ukraine in 2017 is Roshen, a confectionery producer owned by President Petro Poroshenko. Its brand value is estimated to be $274 million. Prior to the election in 2014, Poroshenko promised to sell Roshen. In 2016, he said that he had distanced himself from his business by transferring the company into a blind trust managed by the Rothschild Group.

Food and beverages

Fifty-nine out of the 100 brands in the ranking are from the food and beverage industry.

The most ubiquitous are the alcohol producers – there are 18 of them in the ranking, including six vodka brands: Nemiroff, Khortytsya, Khlibny Dar, Prime, Morosha, Kozatska Rada. Among the top beer brands that made it to the list are Obolon, Chernihivske, Berdychevske, and others, as well as Koblevo wine and Artiomovske champagne.

They are followed by dairy brands: there are nine in the Top 100 list, the most successful one being Yagotynske, which was ranked 27th.

Yagotynske is the most popular of several brands owned by Molochniy Alians (Milk Alliance), a dairy producer founded in 2001 by the former banker and founder of Aval bank Oleksandr Derkach.

There are only two Internet-based businesses on the list, and they are far apart from each other: local e-commerce giant Rozetka is No. 8, and online ads platform Prom.ua sneeks into the ranking at 99th.

The highest-sitting brand that is not food or spirits is Nova Poshta, a shipping company founded in 2001 that boasts over 2,300 offices in Ukraine. It was ranked fifth.

And despite its scandal-soaked nationalization, Ukraine’s biggest bank Privatbank made it to the top of the list as the country’s 6th most valuable brand.

Winning water

Morshinska was founded in 1995 by a Ukrainian businessman Mykola Kmyt. He said in an interview to Channel 24 that had chosen between starting a bottled water, pasta, or dairy company. He went for water because it didn’t require any raw materials. His initial investment, he said, was $30,000.

Later, Morshinska became one of the key brands of IDS Borjomi, a holding uniting several mineral water brands, and belonging to the New World Value Fund of self-exiled Russian oligarch Boris Berezovsky and his partner Badri Patarkatsishvili.

Since 2013, the majority shareholder of the holding has been Alfa Group, the holding belonging to the Russian billionaire Mikhail Fridman.

Among its other brands are Borjomi, named after a famous Georgian mineral water source, and Mirgorodska water.

Branding for offshore

The ownership structure of the companies behind the top Ukrainian brands highlights the vast offshorization of Ukrainian business.

Whether done to evade taxes, protect the business from raiders, or both, the companies producing top Ukrainian products are registered offshore, with Cyprus being the most popular jurisdiction.

The ranking’s winner, Morshinska, is produced by Ukraine-registered Industrial and Distribution Systems, which in its turn belongs to a Cyprus-based International Distribution Systems Limited, part of Russia’s Alfa Group.

Roshen, the ranking’s third most valuable brand, is owned by Poroshenko through companies based in the Netherlands and Cyprus. Since 2016, Roshen’s ownership has been in the center of a scandal after the Panama Papers leak of offshore documents showed that Poroshenko attempted to transfer his Ukrainian business to a company in the British Virgin Islands, a tax haven, suggesting that he could have been plotting to evade taxes in Ukraine.

Vodka brand Nemiroff, No. 4 on the list, named after the town of Nemyriv in Vinnytsya Oblast, is produced by a company owned by the Cyprus-registered Nemiroff Holdings Limited.

Nova Poshta, the brand No. 5, founded by Ukrainians Vyacheslav Klimov and Volodymyr Popereshnyuk, is also owned through an offshore company: NP Holdings Limited was registered in Nicosia in Cyprus in 2016.

Global Spirits, a Ukrainian alcohol producer, owns three brands from the list: Khortytsya (No. 7), Shustov (No. 63), and Morosha (No. 44). Its owner, Yevhen Chernyak, also prefers to control his Ukrainian business through Cyprus-registered companies.

In the past several years Global Spirits has been pushing to become an international brand: Chernyak himself moved to New York to oversee the expansion of his vodka business in the United States.

Brands and taxes

Interestingly, a comparison of the most valuable brands list and a ranking of Ukraine’s top taxpayers, published by the State Fiscal Service, shows very few similarities.

Of the companies among the 10 most valuable brands, only Privatbank and Kyivstar are anywhere near the top of the taxpayers list, being ranked 15th and 17th, respectively.

The entity behind Morshinska, Industrial and Distribution Systems, is not among the 100 businesses paying the most in taxes.

And Roshen, the third most-valuable brand, barely made it to the tax list: It was 90th biggest taxpayer in the first half of 2017.

The highest-paying beverage company, Carlsberg Ukraine, which was ranked Ukraine’s 28th taxpayer, had none of its beers and ciders in the top brands list.

None of the tobacco brands made it to the brands ranking, while tobacco companies topped the taxpayers’ list, along with energy producers and suppliers.