Sour grapes: Heated emotions as Bulgaria’s Customs Agency seals distillery’s warehouses

Written by on September 23, 2018 in Bulgaria - Comments Off on Sour grapes: Heated emotions as Bulgaria’s Customs Agency seals distillery’s warehouses

The penultimate weekend of September in Bulgaria was a balmy one, as summer turned to astronomical autumn, but in the valley of Karnobat, temperatures were running high over the fate of the grape harvest.

This was no mere matter of the weather. Bulgaria’s Customs Agency has sealed the warehouses of the Vinprom Karnobat distillery, the property of Minyu Staykov, who is charged with tax evasion and money laundering. Employees were on their third day of protests on September 23, demanding to know why the crackdown came amid the grape harvest and what would become of their income.

The Customs Agency said that it had established that a device had been rigged so that ethyl alcohol could be processed without the volume being measured by equipment meant to be used to calculate excise due. According to the agency, a huge amount is involved, meaning considerable losses to Bulgaria’s treasury, considering that 1000 leva (about 500 euro) excise is due on 100 litres of ethyl alcohol.

The protests by the employees at the weekend saw, among other things, the blocking of the Sofia-Bourgas railway line on Saturday, which also happened to be the first day of a three-day weekend as the country celebrates Independence Day.

But after the sealing of the warehouses in Tserkovski and Venets, the mood among the employees, who in total reportedly make up a workforce of 1500, was anything but celebratory. On Sunday, they held posters saying: “We are not criminals”.

“We want salaries! Open our factory!” the protesters shouted.

The Customs Agency’s deputy director, Julian Mirkov, told the media on September 23 that “numerous violations” had been found at the sealed warehouses of Vinprom Karnobat, and precautionary measures had been taken to secure evidence and avoid damage to the state’s coffers.

It was possible that the grape harvest would be stored and it would not be destroyed, Mirkov said.

“The Customs Agency has allowed the grape harvest to be deposited in the tax warehouse for storage so as not to waste it as quality, nor has anyone said that the employees of the plant cannot go to work, there is only a clear ban on the finished products,” Mirkov said.

The equipment that had been found that enabled the tax evasion had been sealed so that the finished product could not drained or removed, he said.

On Sunday, it was announced that the Customs Agency wanted the warehouses sealed for a further 60 days, a move that further outraged the employees.

In the late afternoon, Bulgarian-language media reported that the district court in Karnobat had ruled that on the evening of September 23, the winery in the village of Tserkovski could be opened, while the spirits factory in Tserkovski and the bottling plant in Venets would remain sealed for another day. Employees would return to work on Tuesday.

On hearing the court judgment, the employees chanted: Победа, победа. Victory, victory.

The company’s chief executive, Yovko Yovkov, said before the court ruling that were the production cut-off to be extended, the company would go bankrupt and tons of production would go to waste.

Yovkov said that the Customs officials had misunderstood the purpose of the device to which they objected. “When incompetent people try to handle technology they do not understand, it is a manipulation of public opinion,” he said.

Earlier, gendarmerie guarded the railway line so that it could not be obstructed again. The protesters moved their protest to the pedestrian walkways of Karnobat. They were eager to deny to the media that any crime had been committed. The Customs Agency continued to insist that the warehouses should remain sealed, and issued a reminder that the punishment could be the loss of the production licence.

Vinprom Karnobat’s products will be familiar to any customer in a Bulgarian supermarket, or shop in a town or village. According to the company’s website, the brands include the Karnobat, Kehlibar, and Perlova rakiyas, as well as mastika, mente (creme de menthe), brandy, Ethno wine, boxed white and red wines, and Rose Chateau Karnobat. The company’s site also boasts of awards it has won in Bulgaria and abroad.

News of Vinprom Karnobat’s troubles first emerged on September 7, when Bulgaria’s special prosecutor’s office said that it charged eight people with tax evasion and money laundering following a raid two days earlier at the offices of spirits maker Vinprom Karnobat, its parent company SIS Industries and flour manufacturer Topaz Mel. One of the people charged as part of the investigation was Minyu Staikov, the owner of Vinprom Karnobat and Topaz Mel.

At the time, prosecutors said that they were still gathering evidence to ascertain whether Minyu Staikov or his son, or both, were at the helm of the organised crime group that allegedly operated an illegal cigarette-making factory, including counterfeits of foreign brands.

An investigation had begun after a cigarette factory was discovered in Karnobat’s industrial area in July. At that time, law enforcement raided the facility, which was not in use, and found cigarettes worth three million leva in storage.

On September 23, the Customs Agency said that the sealing of the warehouses had followed an investigation into excise compliance held between September 5 and 20.

The Vinprom Karnobat drama comes at the close of a difficult summer for Bulgaria’s grape harvest, with the unseasonal rains of June and July having negatively affected output, raising the possibility of higher consumer prices of Bulgarian wine and rakiya.

Whoever was telling the truth on this hot weekend in September 2018 in Bulgaria, in the valley of Karnobat, the harvest was a bitter one.

(Photo: Clive Leviev-Sawyer)

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