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Wednesday 21.03.2018 | Name days: Una, Unigunde, Dzelme, Benedikts

Traders: buyers will have to open up their wallets more next year

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe majority of traders have received letters from producers containing similar text, concerning procurement price rise and new prices for the next year. Here is an example: «Due to a rapid rise of milk procurement prices up to 40%, A/S Cesvaines Piens has increased sale prices for its products. With that, A/S Siera Nams announces the increase of sale prices for A/S Cesvaines Piens products starting with 06.01.2017.»

This rise of expenses is a reason for concern – not only will real estate tax for land and tax associated with employee wages rise, but so will electricity prices in the second half of next year. Prices of products will rise even more because of that. Unfortunately, this also applies to everyday food products, including milk, butter, sour cream and cottage cheese, as reported by Latvian Traders Association.

Milk price this year was one of lowest in the past five years – EUR 0.72- EUR 0.75 per 1 litre. Price rise began in August with EUR 0.80, reaching EUR 0.91 in December. It is possible the price level will reach that of 2012 and 2014 next year – EUR 0.96 per 1 litre. Sour cream price is currently stable, reaching EUR 1.25 (360g). It is likely the price may reach EUR 1.54 next year. Butter price is stable and has returned to the level of January – EUR 1.03 (200g).

Traders say had normal milk prices from businessmen’s and consumers’ viewpoint. Prices have increased by 40% since September. Such a rapid price rise appeared as a result of milk procurement prices from other countries. A Polish milk processing company procures milk in large volumes and at a higher price than local residents. In spring 2016, the government announced that milk quotas had been exceeded and that it would be necessary to reduce production volumes.

LTA explains that a situation has formed when milk processing companies primarily supply local store networks with products. Other traders are supplied with surplus products. ‘Because of that, we’re worried that producers ignore supply contracts for small companies. Large companies, on the other hand, use market advantage and the current situation to attract customers from other companies. We believe the Competition Council should make sure supplies are balanced and small traders are not discriminated and buyers are able to buy products in local stores, not be forced to go to Rimi or Maxima supermarkets,’ – traders say.


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