According to a recent report by Ukrainian newspaper ZN.UA, the country’s Defense Ministry is purchasing food for military personnel at prices that are significantly higher than those found in grocery stores in Kyiv. The newspaper obtained a Defense Ministry contract for food procurement in 2023, which totaled Hr 13.16 billion ($360 million) and was signed on December 23rd.
Upon reviewing the document, journalists found that the Ministry had agreed to purchase eggs at Hr 17 each, while the retail price in Kyiv grocery stores is closer to Hr 7 per egg. Additionally, the Ministry contracted to buy potatoes at Hr 22 per kilogram, while the retail price in stores is around Hr 9.
It is worth noting that these comparisons are made with retail prices, which already include both the manufacturer’s profit and the store’s markup, and are therefore higher than wholesale prices. Furthermore, the contract also includes provisions for catering services, which account for a small percentage of the total cost, and do not justify the inflated prices.
The contract was allegedly signed by Bohdan Khmelnytsky, the head of the Ministry’s state procurement department, who is currently under investigation for alleged embezzlement in the procurement of ammunition for the military.
In response to the report, Defense Minister Oleksii Reznikov issued a statement calling the inflated prices a “technical error” made by the contractor, and dismissed the investigative report as “nothing but manipulations.” He also promised repercussions for those who leaked the contract to journalists, and stated that the Security Service would be looking for the alleged whistleblower.
Update (January 25,2023)
The recent reports of Ukraine’s Defense Ministry purchasing food for military personnel at inflated prices has led to a major upheaval in President Volodymyr Zelensky’s government. Several top Ukrainian officials were fired on Tuesday, including Viacheslav Shapovalov, a deputy minister at the Defense Ministry, who “asked to be fired” following the reports.
The Ministry of Defense stated that the accusations of corruption are unfounded and baseless, but relieved Shapovalov of his duties in order to “preserve the trust” of Ukrainians and the country’s international partners. However, the fact that it took three days for Shapovalov to step down raises serious questions about the Ministry’s commitment to rooting out corruption, according to Vitaliy Shabunin, the director of operations for the Anti-Corruption Action Center, a Kyiv-based NGO.
This is the biggest upheaval in President Zelensky’s government since Russia’s invasion began 11 months ago. Zelensky has promised to root out government corruption and these firings follow a number of allegations of such corruption.
Haroon Haider 