Risks
Risks can arise both due to forecasted and unforecasted situations. They all endanger the reputation and sustainable development of the corporation. During the reporting period Obolon faced a range of economic and social risks which impacted the staff and other stakeholders of the corporation.
Forecasted risks
Fiscal policy
- Increased rates of excise duty
Increase of excise rate for beer by 100% – from UAH 1.24 to UAH 2.48 in 2015 - Excise rate for beer sales
Excise rate of 5% for beer sales in retail networks
| Impact - In 2015, the beer market in Ukraine decreased by 18%
- Annual average of production capacities in the industry amounted to 50%
- Lack of transparency in distribution of tax revenue
|
Unforeseeable risks
Financial crisis
- Depreciation of hryvnia
At the end of 2015 the hryvnia exchange rate to the US dollar rose to UAH 23.9 to $ 1, compared with the rate of UAH 8 to $ 1 at the beginning of 2014.
| Impact - Increase of raw material, energy resources and logistics services cost
|
Currency depreciation against USD, %
Falling of consumer demand
- Buying capacity decrease
Consumer confidence index (CCI) is a trend indicator of changes of consumer demand among the population.
| Impact Beer is not an essential product. A drop in income of the population = a drop in beer consumption. |
Start of anti-terrorist operation (ATO)
- Hostilities in the east
On 14 April 2014 the anti-terrorist operation (ATO) was started. Decree of the President of Ukraine No. 405/2014.
| Impact - Loss of 7% sales territories in the occupied Donetsk and Luhansk regions
- Warehouses robbed in Donetsk and Luhansk
- Loss of jobs of the company's sales teams in the zone of the ATO
- More than 100 company employees were mobilized
|
Year of the ATO. Results
- Ьore than 9 thousand people have died
- 21 thousand people were injured
- 1,9 million people became internally displaced
- Over 12 thousand properties were destroyed
