Agriculture Minister: Latvia might need food retail prices regulator

Minister of Agriculture Didzis Šmits (United List) considers the creation of a separate regulator for monitoring food prices in the Latvian retail sector, the Minister told Latvian Television on July 20.

According to the Minister, it has been apparent for years that there is no real competition in Latvia in the food retail sector. "If a product can be subject to a markup of 300% plus VAT and compete, that means there are so few players and the market is so divided that some sort of intervention here is logically necessary," Šmits said.

The Minister said that the Competition Council is investigating the formation of five food groups and the mark-ups imposed on them. “The conclusions will be very soon, let us wait for them...” Šmits said, pointing out that he did not support state interference in the market and regulating food prices in shops, as it would also be a return to the Soviet times.

But a welcome idea would be monitoring and publishing food prices. Šmits said that food prices in stores could be supervised by a special regulator. Also, Finance Minister Arvils Ašeradens (New Unity), who is concerned about the significant impact of food prices on inflation, has indicated that a regulator is an option to consider.

A number of farmers' organizations have also expressed concern about the markup for food products in supermarkets. Guntis Gūtmanis, Head of the Farmers Organizations Cooperation Council (LOSP) told LTV: if there is a desire to be fair to consumers, suppliers and traders must make public their prices and surcharges.

“We're hiding behind the 'commercial secret' right now. It's true that the agreements state that such prices may not be made public without the consent of both parties. Our call is for all stages involved in the chain – producers and processors and traders – to make public these surcharges, and then we will see which side is making the markup,” the head of the LOSP said.

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