Imported Cheese and the Ukrainian Price: Why the Industry Is Caught Between Losses and Uncertainty

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Cheese production in Ukraine is entering a high-risk zone. Time for Action has examined why one of the country’s largest market players the Milk Alliance Group openly declares this segment unprofitable, and why the problem goes far beyond a single company.

Chairman of the Supervisory Board Serhii Vovchenko acknowledges that cheese is currently difficult to sell, with margins minimal or negative. The reason is a sharp increase in imports and aggressive price competition from European producers.

“Currently, cheese production is indeed unprofitable. Cheese sells poorly, and competition with Polish imports is very strong.”

According to the State Customs Service, in 2025 Ukraine imported 42.3 thousand tons of cheese 10.4% more than a year earlier. In monetary terms, the increase is even more noticeable up 19.9% to $272.3 million. Nearly half of imports come from Poland 43.4%. Germany follows with 16.4% and the Netherlands with 8.1%.

These figures indicate a simple reality: the domestic market is being filled with cheaper foreign products, making it increasingly difficult for Ukrainian producers to compete. At the same time, companies cannot raise their own prices consumer demand remains weak. Any price increase risks further reducing sales. As a result, the producer is forced to act cautiously: relying on promotions and sales stimulation, while covering cheese segment losses with profits from whole milk products. In practice, one part of the business is supporting another.

Despite financial losses, the company does not plan to halt production. More than 500 people work at the cheese plant. The decision to maintain the segment carries not only economic, but also social significance. The issue extends beyond processors. Ukrainian dairy farmers are also under pressure: milk production costs exceed purchase prices. By autumn, production may decline by 20%. This creates risks of deeper imbalances from raw material shortages to further dependence on imports. Another blow comes from export markets. Ukrainian dairy products are losing ground in the Middle East and North Africa. European producers offer lower prices, and price is the decisive factor for buyers.

“In the Middle East and North Africa markets we are known and appreciated, but we are being pushed out by European producers because everything is cheaper there.”

Thus, the industry faces a dual challenge: cheap imports within the country and a loss of competitive positions abroad.

An additional risk is the expiration on June 5 of the duty-free trade agreement with the EU. Uncertainty regarding future trade rules complicates strategic planning for businesses and puts new contracts at risk. For some companies, the cancellation of the “trade visa-free regime” may mean ceasing operations.

Finance Minister Serhii Marchenko warns of possible “devastating consequences” for the economy if the agreement is not extended. According to government data, revenues from exports to the EU under autonomous trade measures accounted for nearly one tenth of the country’s $41 billion export earnings in 2024. The business community has already appealed to European Commission President Ursula von der Leyen to extend the barrier-free trade regime. Deputy Minister of Economy and Trade Representative of Ukraine Taras Kachka has stated that Ukraine is ready for flexible solutions and transparent trade rules, while acknowledging that the issue is largely political.

Within the industry, short-term support mechanisms are being discussed. The Union of Dairy Enterprises has initiated a cashback program for bulk cheeses that were previously excluded from state support. The idea has received preliminary backing at the governmental level, and a final decision is pending. The calculation is straightforward partially stimulate demand for Ukrainian products and reduce import pressure.

The cheese market has reached a difficult point: weak demand, rising imports, expensive raw materials, and uncertainty in trade with the EU. If these factors continue to converge, minimal margins may turn into systemic losses for the entire sector. At that stage, the issue goes far beyond the balance sheet of a single enterprise. It concerns jobs, food security, and the ability of Ukrainian producers to withstand price competition both domestically and internationally.