Food reform or high-risk venture: what Zhumadilov is leaving behind for Khmara
In early August, the Ministry of Defense announced changes to food procurement to improve its quality. Food procurement has always been rife with corruption, and reform has long been overdue.
Right from the early stages of the ‘State Logistics Operator’s’ work, Zhumadilov’s team proposed its own version of the reform through the introduction of the so-called 3PL model. It was even trialled in 2024 in the Kyiv region. As Zhumadilov is leaving the agency on 1 September, he will not be held accountable for the results.
But the question remains as to whether it will be possible to implement it at all.
As the author of this article was involved in most of the meetings on this subject, it is worth explaining everything – from the idea to the potential consequences.
This year began with a massive scandal surrounding the head of procurement for one of the brigades, who had set up such a successful scheme with the Busk canning factory that he even bought himself a house in Bali. This is not to mention his numerous trips, cars and designer goods.
But what’s interesting is that the State Bureau of Investigation spoke of suspicions regarding the head of procurement but did not name the company that had been so corrupt. Although as recently as 2024, Busk was the leading food supplier thanks to the quality of its products.
Arsen Zhumadilov had the option either to drop the company (incidentally, last year the company ‘Grand Prix’ lost a 3-billion contract due to a directive from the State Bureau of Investigations), or to propose an alternative solution. In early March 2026, the head of the Agency for Defence Procurement approached Minister Mykhailo Fedorov and stated that the problem lay not with the company but with the system itself, and proposed scaling up the 3PL model for food supply to the Armed Forces of Ukraine across 11 regions of Ukraine.
The presentation was given at a meeting attended by the State Secretary of the Ministry of Defence and the Logistics Forces Command on 11 March 2026.
The essence of the proposal: in light of instances of grassroots corruption, it is proposed to move from the current model (4PL), under which a single supplier is responsible for the entire chain from procurement to delivery to the unit, to a 3PL model, under which the functions of goods procurement and logistics services are, in theory, separated. A pilot of the model was carried out in the Kyiv region in the first half of 2025.
What did the DPA propose at the initial meetings?
The 3PL model provides for the separation of the functions of goods procurement and logistics services. The DPA conducts indicative tenders amongst manufacturers, sets prices, whilst the supplier-operator procures goods from manufacturers, stores them at the distribution centre and delivers them to the units. The DPA has representatives at the distribution centre for incoming quality control. However, the catalogue continues to be used.
Let me remind you that the military procures three meals a day (around 120 per day), for which the food is priced. Items are selected from the catalogue based on their calorie content, with 360 entries in total. It is precisely this catalogue that forms part of the manipulations carried out by supplier companies. Back in 2004, the Logistics Forces Command refused to split the catalogue into separate food groups and purchase logistics separately, as this would have resulted in units having to deal with a greater number of payment invoices.
At that time, the team at the State Logistics Operator (SLO) proposed a quasi-model, whereby indicative tenders for foodstuffs were held separately; based on the results, manufacturers would then sign contracts with a logistics operator, who would subsequently submit a priced catalogue.
It was in this form that the State Logistics Operator announced a large-scale reform in the autumn of 2024. However, instead of covering eight regions, it was only possible to trial the scheme in the Kyiv region. Even then, it only got off the ground on the second attempt.
However, an analysis of the contract concluded between SLO and "UT Company" Ltd (the 2025 pilot scheme) reveals a significant discrepancy between the declared model and its actual implementation.
At the same time, the ‘pilot’ was underwritten by suppliers under the old model, who covered any shortfalls.
‘UT Company’, which won this project, acted not as a standalone logistics operator but as a supplier-intermediary — structurally similar to a 4PL.
Only two bidders took part in the tender worth 1.4 billion hryvnias. By way of comparison, 4PL tenders typically attract between 8 and 14 bidders.
There were some shortfalls in the supply of certain product groups, but overall quality improved.
However, prices in the project were around 20 per cent higher than in 4PL.
According to an analysis by the Independent Anti-Corruption Commission, over 300 items in the catalogue were found to be more expensive, whilst not a single one was cheaper.
| Comparison result | Number of items | Share |
| 3PL (UT Company) MORE EXPENSIVE | 300 | 97.4% |
| 3PL (UT Company) ON A PAR | 6 | 1.9% |
| 3PL (UT Company) CHEAPER | 0 | 0% |
Statistics on price overrun (300 items): average +38.8 UAH, maximum +230 UAH. The largest ‘overpayments’ were in the categories of drinks (average +102.5 UAH), spices (+85.5 UAH) and fish (+70.5 UAH).
| Product | MitProm 114 | MitProm 112 | Adelin | 3PL (UT) | Overpayment |
| Instant coffee | 730 | 648 | 500 | 730 | +230 |
| Cod liver (tinned) | 550 | 498 | 595 | 700 | +202 |
| Allspice berries | 270 | 448 | 450 | 450 | +180 |
| Food concentrates (main courses) | 405 | 255 | 270 | 425 | +170 |
| Food concentrates (soups) | 355 | 255 | 270 | 425 | +170 |
| Vanillin | 240 | 240 | 380 | 400 | +160 |
| Chilled trout | 300 | 268 | 420 | 420 | +152 |
| Edible gelatine | 228 | 228 | 375 | 380 | +152 |
| Whole black peppercorns | 216 | 358 | 360 | 360 | +144 |
| Black tea in tea bags | 320 | 278 | 220 | 360 | +140 |
| Tinned tuna in oil | 235 | 198 | 182 | 320 | +138 |
| Smoked ground paprika | 198 | 198 | 198 | 330 | +132 |
| Black tea with additives, in tea bags | 320 | 298 | 220 | 345 | +125 |
| Packaged green tea | 320 | 208 | 220 | 330 | +122 |
| Butter for sandwiches 61.5–72.4% | 250 | 280 | 180 | 300 | +120 |
| Coffee drink | 180 | 248 | 300 | 300 | +120 |
| Packaged green tea with additives | 320 | 258 | 220 | 330 | +110 |
| Ground red pepper | 250 | 162 | 200 | 270 | +108 |
| Boneless smoked brisket | 250 | 215 | 160 | 260 | +100 |
| Beef, steak (cutlet) | 210 | 240 | 270 | 310 | +100 |
At meetings in March and April, the DPA acknowledged that prices would potentially be higher.
Moreover, Zhumadilov proposed that the state fund the construction of warehouses for the companies.
The Logistics Forces Command was strongly opposed to the new model covering 11 regions at the time and proposed testing it at training centres, where there are traditionally problems with catering.
The DPA took some time to consider the matter.
By the summer, the idea had been refined to include menus for military units, with the system automatically calculating how much food was needed for borscht and stew.
Two weeks later, the idea was announced on the Ministry’s website.
However, there is a major question as to whether it will actually work.
Why? The first risk is security-related. We are currently witnessing russia launching mass attacks on large retail chain warehouses. It is not hard to imagine what would happen to a warehouse supplying the Armed Forces of Ukraine in such a scenario.
The second risk is that this model offers no guarantee against short deliveries or falsified invoices if the status of logistics operator is granted to established players with a reputation for corruption.
The third risk is that the price will be higher than under the old model. And the DPA has already acknowledged this.
The fourth risk is that the higher price can obviously only be justified by guaranteed quality. But this raises the question of who will work at the distribution centre. The DPA does not have the staff for this. They could be provided by the State Agency for Food Safety and Consumer Protection. But even there, they are currently saying that staff numbers have been cut, whilst the workload has increased. Of course, the situation will be improved by the fact that, should any poor-quality products be detected, the manufacturer will bear the reputational damage. But this is of no help if intermediary companies take part in the pilot tenders.
And there is also the question of how the catalogue will be assessed following the indicative tenders and when the expected value of the lot will be determined.
And the icing on the cake is that even the DPA staff themselves doubted they would be able to launch this model.
In other words, Arsen Zhumadilov is leaving behind a project whose risks and grey areas will now be someone else’s headache.
Tetiana Nikolaienko, Censor.NET
