Russia has destroyed 90% of modern warehouses in Ukraine, agriculture ministry says

Russian attacks have destroyed around 90% of modern storage facilities for goods in Ukraine.

Source: Taras Vysotskyi, Ukraine's Minister of Agrarian Policy and Food, at a press conference on 28 August, as reported by Interfax-Ukraine

Quote: "Ninety per cent have been destroyed. But that doesn't mean Ukrainians will be left without food. There is no threat of famine."

Details: Vysotskyi pointed out, however, that the attacks on logistics infrastructure may affect the range of products available in the shops.

Retail logistics are changing due to the constant destruction of warehouse infrastructure. Vysotskyi said the most realistic alternative right now is to supply goods using a "just-in-time" system, although it is more complex and expensive.

Some businesses are currently relocating to other sites, but Russian attacks are already being recorded at their new locations as well.

Vysotskyi also said he is in favour of risk being equally distributed between participants in the supply chain in the event that goods are destroyed by Russian attacks, while stressing that the state is not a party to these commercial and contractual relationships.

Quote: "When it comes to the supply and sale of goods, we currently have no state operator in this chain. These are purely commercial and contractual relations between the parties involved.

Nonetheless, from our point of view, an equal distribution of risk would be fair."

More details: Vysotskyi said that the mechanism for compensating for losses due to destroyed goods does not necessarily have to entail splitting the losses 50/50, since different products carry different markups, sales conditions and profitability.

Quote: "It would be fair for the distribution of risk on goods to be set out depending on the final economic impact. It can't be 100% on one side. But it should be done on a case-by-case basis, depending on the product category and the terms of cooperation."

Background:

• On the night of 4-5 August, Russian strikes damaged or destroyed four Fozzy Group distribution centres that supplied the Silpo, Fora and Thrash! supermarket chains. Six employees were killed in the attack.
• On 27 August, a warehouse belonging to the Kolo grocery store chain was damaged as a result of a Russian attack. That same day, a Russian attack damaged a warehouse in Kyiv Oblast used by the Fora grocery chain, which had started using it just four days earlier.
• On 20 August, a Russian attack damaged another Fora warehouse in Martusivka, Kyiv Oblast, where fresh produce was stored. The facility had been operating for just one week.

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