Retail restrictions continue harming small businesses in Latvia

Take note – story published 3 years and 4 months ago

Since last Monday, stores are allowed to sell a wider range of goods but must provide more space per visitor. Businesses are not satisfied with this rule, according to Latvian Television broadcast "Aizliegtais paņēmiens" (Forbidden Method) February 15.

As of February 8, all stores must provide 25 square meters per visitor in the shop. This creates queueing outside. The proposal to enforce this rule was submitted to Economics Ministry by the Latvian Chamber of Commerce and Industry (LTRK), alongside a proposal to open all shops. However, only the first part was adopted by the government, along with extending the range of goods to be sold, but not opening all stores.

According to the LTV broadcast, the Ministry of Economics could not explain how it came to the decision.

LTRK Board Chairman Jānis Endziņš said that the previous requirement was 15 square meters excluding store shelves, now the requirement is 25 square meters - counting shelves. It is allegedly easier to calculate.

Henrika Danusēvičs, chair of the Latvian Traders Association (LTA), said that the rules were not in the interests of the industry.

“It is absolutely absurd that there may be only one buyer in 49 square meters. Decisions are made by people who are neither in business nor in commerce and do not want to listen. Unfortunately, also the heads of the Chamber of Industry – both Endziņš and Zariņa. They have no experience or understanding of retail, and that's why they are advancing rules that don't suit the interests of the industry,” Danusēvičs said.

Endziņš said that there were also many retailers working with the LTRK, and that, along with the 25-square-meter rule, they had called for the opening of all stores, including clothing stores. It was also supported by the Ministry of Economy, which brought the proposal to the government, but decided otherwise.

The head of Economics Ministry Internal Market department Inga Apsīte said that this model was accepted given the high prevalence of Covid-19. It is unknown who was the author of this decision.

Competition Council Chairman Juris Gaiķis said that the restrictions on retail are legally correct. If the shop suffers from any government decision, then it has compensation mechanisms. At the same time, he acknowledged that as a result small businesses will no longer be able to exist.

"At the moment, we have found that the largest concentration of the market is taking place directly for these large operators with resources available. Also with the previous limits. Operate the Internet environment, build your own supply chains. Consequently, it leaves small businesses with little opportunity to participate in this market.

"The consequences of this could be that these small traders will either go bust or be combined with the big ones. This would lead to a stagnation in competition, as there would be no small players who, through their innovative actions, could improve consumers' interests and offer a variety of interesting solutions," Gaiķis said.


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