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Tuesday 16.01.2018 | Name days: Lida, Lidija
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Product prices in Latvia approach consumers spending limits

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Currently, the Saeima’s proposed amendments to the Competition Law will not only reduce the assortment of goods and launch of new products, but also worsen the local production possibilities to compete with imported goods, indicates Noris Krūzītis (Kruzitis), the Executive Director of the Latvian Food Traders Association (LFTA).

Already now, the law stipulates that traders have to settle payments within 30 days for food products with period of use not longer than 20 days, such as dairy products, bread, meat, fruits and vegetables. The aim of these amendments is to ensure that traders settle with producers within 30 days for all the procured food products, including jams, canned products, beverages, biscuits, namely, products whose shelf life lasts even for several months.

In general, it may seem that the only effect of this law is that traders will be forced to settle payments with manufacturers more quickly, yet it does have more serious consequences. Damage caused to the Latvian businessmen by this proposition  has neither been discussed, nor taken into account, Kruzitis indicates to the business news portal BNN.

Latvian food producers are often unable to provide competitive prices for equivalent import products. Time-limit of settlement is one of competition elements, along with such indicators as the price and quality. If during discussions on launching the product at stores, the possibility to compete with more favourable conditions is excluded, Latvian producers will lose in these negotiations, Kruzitis explains.

At the same time, the law will not apply and in no way restrict such powerful foreign companies that, according to the Competition Law, are not dependent on Latvian retailers. These leading European and global market leaders will be given another fighting tool to allow ousting local businesses from the competition.

Latvian consumers’ patriotism is not endless, and they are starting to assess product prices. Already now, Latvian product prices are dangerously close to the limit people can no longer afford them. Therefore, the LFTA hopes that all opinions will be considered in the final decision, finding an economically-viable and balanced solution, says Kruzitis, indicating that several market surveys, as well as traders’ observations show the price is still the key product selection criterion for consumers in Latvia.

It should be noted that the Deputies’ offered regulation is much more severe than in Lithuania, which is often referenced by the government. Lithuania has set 30 and 60 day time-limits for settlements, depending on the commodity group.


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