Concerns raised over €30m aid for Ukrainian agri-food giant

Ukraine-based agri-food giant MHP has been given a €30m (£26.4m) boost by the UK government, sparking concern among industry stakeholders over equivalence of production standards.

The Ukraine Recovery Conference, held in Rome in July, heard that British International Investment (BII) would provide the financial support to MHP.

Farmers Weekly understands that the loan, earmarked for sunflower seeds, is being made in instalments over three years, with seasonal repayments to be made by the company in line with the seedstock production cycle.

See also: Buoyant outlook for UK poultrymeat and egg market

MHP is Ukraine’s largest poultry and processed meat producer, and exports to more than 70 countries.

In statement it said the loan is being used to “create a strategic stock of sunflower seeds for MHP’s crushing operation to support Ukraine while it continues to sustain Russian aggression”.

“Additionally, it will benefit thousands of small businesses, including more than 2,000 small retail stores and 2,500 local farmers, by ensuring the continued stability and growth of MHP’s supply chain,” the statement said.

A spokesman for BII, said: “Our investment in MHP supports food security, safeguards jobs, and builds long-term resilience in the country’s agriculture sector during wartime.”

Undermining UK producers

However, the NFU has expressed concern about the decision to fund a foreign competitor which also has significant stakes in the poultry and pork industries, and at a time when Ukrainian egg imports are already targeting the UK.

While the NFU said it appreciates that the government wants to support Ukraine and “recognises the importance of helping Ukrainians at this disastrous time”, decisions made “must not undermine British producers”.

Since 2022, the UK government has provided support for Ukraine, including a suspension of all tariffs and quotas on Ukrainian poultry products entering the UK. This is due to expire next March. 

NFU Poultry Board chairman Will Raw said: “With the government’s focus on food security and fairness in the supply chain, ministers must not allow food produced to methods that would be considered illegal in the UK from being imported.”

He added that such moves undermine UK farmers and dent consumer confidence and that it remains imperative for the right balance to be achieved to “prevent any level of well-meaning support resulting in unintended consequences for British food producers”.

Domestic industry support

Jason Aldiss, executive director at the Association of Independent Meat Suppliers, added that the organisation fully supports humanitarian aid to Ukraine, but questions whether it was a good use of British taxpayers’ money.

“The UK government needs to approve poultry industry planning applications in order to help our domestic industry first, rather than undermining it by providing cash injections to competitor nations such as Ukraine,” he added.

The British Poultry Council, whose board member Philip Wilkinson is a non-executive director at MHP, said it could not comment on the commercial arrangement between the UK government and a foreign company, but it “would obviously like to see the government support the UK poultry industry in a similar manner if such help were needed”.

Lack of equivalence

Red Tractor assurance stipulates a maximum stocking rate of 38kg/sq m of live birds, while retailers and food service outlets in the UK require that stocking levels not exceed 30kg/sq m under Compassion in World Farming’s Better Chicken Commitment.

For EU producers, this is set at a maximum stocking density of 33kg/sq m with exceptions of up to 39kg/sq m and 42kg/sa m under stricter conditions.

However, MHP said it is taking steps to align with EU animal welfare standards, and aims to meet the EU-required 33kg/sq m by January 2026.

“The wide-reaching impacts of allowing such imports stalls investment, erodes growth and affects overall resilience in a vital sector that provides such an important source of protein to feed the nation,” added Mr Raw.