Latvian co-op stops milk production due to industry crisis

Agricultural Services Co-op Society Dundaga has decided to stop dairy production from July, Jānis Zadiņš, chairman of the Co-op Society's board, told LETA June 29.

He explained that the decision in question was influenced by a number of factors, including high production costs.

Zadiņš also noted that the cooperative's production plant was in the historic dairy building of Dundaga, which required additional financial investment to meet environmental requirements standards, which coincided with a difficult time for the industry.

Production-related prices of energy resources and raw materials also increased, which led to a significant increase in the price of final products. As a result of the rapid decline in purchasing power of the population, the population is more inclined to choose alternative and cheaper foreign dairy products.

Zadiņš explained in order to address the temporary financial problems of Dundaga due to the above-mentioned circumstances, as well as the cooperative's commitments, the owners have decided to initiate the legal redress process, which was approved by a court decision on Monday, June 26.

“During this process, the cooperative will sell movable and immovable property, including the Dundaga dairy building, in order to meet its commitments to the State Revenue Service (VID) and other creditors,” Zadiņš said.

He said that the uncovered losses of previous years for the cooperative amounted to a total of €108,863. The co-op employed 14 people at the plant and 21 in trade and administration.

The cooperative was registered in 1992. Last year, the co-op had 26 members from Talsi and Ventspils municipalities. The cooperative deals with milk processing, wholesale, and retail trade of dairy products.

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