The sector is repeatedly asking the government to reduce the value-added tax (VAT) on food, as well as to provide direct support to dairy businesses.
The rapid rise in both energy resources and other costs since the autumn of last year has led to unprecedented increases in the purchase price of raw milk. This year, the price per liter has exceeded 44 cents, which means a rise of more than 40% during the year. In an emergency congress on Thursday, April 21, the Latvian Dairy Committee (LPCS) warned officials that residents would not be able to afford dairy products if the price included all costs.
“As costs continue to rise, we expect this price to be very high in the coming months, autumn. In view of the other costs related to energy, heat, and so on, we need to look for some solutions,” said Harijs Panke, Vice-President of the Rīgas piena kombināts dairy plant.
The industry is repeatedly asking for reduced VAT on food to make products cheaper. The LPCS warned at the same time that cutting VAT would not be enough. In order to avoid bankruptcies and to survive increases in raw material prices, companies also need subsidies.