bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Wednesday 17.07.2019 | Name days: Aleksejs, Aleksis
LithuaniaLithuania

Lithuanian PM, a presumable presidential hopeful, set to curb grocery price growth

FaceBook
Twitter
Draugiem
print
(+1 rating, 1 votes)

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

Linas Jegelevičius for the BNN

Having chastised food retailers on many occasions for high grocery prices, Saulius Skvernelis, the Lithuanian Prime Minister, stepped forward in the bid to harness local supermarkets. The presumed presidential candidate of the ruling Farmers and Greens (LVŽS) has summoned this week executives of major retail food chains, scolded them and reaffirmed his pledge to rein in the edging up prices.

Before, PM spearheaded a plan to set off the big players’ dominance by strengthening small and medium-sized grocers (it was purposely or not leaked), proposed a VAT cut on food products and, this week, invited foreign retailers, including Germany’s Kaufland, to invest into Lithuania.

«Indeed, Skvernelis, as the most likely presidential candidate of the ruling party, is smart prioritising the topic of food prices. Their growth is an acute topic to all and his efforts to reduce them play out well with voters from different electoral layers. The intent is populist, yet can be efficient in garnering support in the election,» Lauras Bielinis, a political analyst and associate professor at Kaunas Magnus University, told BNN.

After the meeting on Wednesday, PM continued to criticize supermarket operators, claiming that they did not say «anything new».

«Essentially, I heard the same, i.e. that all (regarding the prices) here is well functioning, that Lithuania remains one of the EU countries with the lowest food prices, that we do no face any problems and so on. I really cannot agree with that, therefore the Government has already scheduled a meeting next Wednesday to consider concrete plans and measures aimed at increasing competition and fostering small and medium-sized businesses,» Skvernelis said. He added: «It is difficult to refute the fact that over the last seven years food prices grew at a speedier pace than the prices of feedstocks and the import. However, our food retailers are denying it».

Asked by reporters how he intends to put prices under control, Skvernelis mentioned the necessity to strengthen small and medium-sized food vendors, increase competition in the trade sector, and to attract more investors to the market.

«I will sign a letter this week, inviting 12 major investors from EU states, operating retail chains, to come and invest in Lithuania as the government’s decisions now allow investing, having safe investment conditions, having good return on investment, and these decisions will be made,» he told journalists after a meeting with representatives of major retailers in Lithuania.

During a meeting with visiting German Chancellor Angela Merkel last Friday Skvernelis invited German retail chain Kaufland to come to Lithuania, although the chain had said it is not interested in Lithuanian market for now.

Today, the other German retail chain, Lidl operates in Lithuania, which, alongside Kaufland, belongs to the same German retail group, Schwarz Gruppe.

When meeting Merkel, Skvernelis emphasised that Lidl’s arrival has increased competition among shops, which created preconditions for prices to decline, and that it would be even more beneficial for Lithuania if Kaufland came as well.

PM especially criticised the Competition Council that is in charge of monitoring competition in the country.

«I really think it works poorly. I believe they do not defend interests of consumers,» Skvernelis noted.

Meanwhile, representatives of Lithuanian retail food chains were cautious reflecting on the PM proposals on competition increase and disapproved the Government’s proposal to close supermarkets on Sunday.

«I understand that the issue of food prices is an acute topic for Lithuanian people and the Prime Minister, too. However, the increase (of prices) over the course of the last four years has been relatively insignificant. According to Eurostat, the prices went up 5.3 per cent over the period and upped 4.2 per cent after the adoption of the euro. As the leader of the market, I want assure that changes of our prices will be minimal,» Kristina Meidė, head of Maxima LT, said.

She, however, expressed doubt over PM’s intent to invite 12 Western retailers to Lithuania.

«I just simply do not see any room for them,» she said.

The CEO argued that namely large food retailers offer lower prices, not the small ones.

«It is so because we can acquire goods and feedstock from which our items are produced at lower prices,» she accentuated.

Meidė also thumbed down the PM proposal to close food supermarkets on Sundays, saying that Maxima employees, as well as the small businesses operating at the supermarkets would suffer as a result.

«At the end, we would definitely see an adverse impact on the state budget,» the Maxima CEO cautioned.

«We have to consider that, in Lithuania, namely weekends are the days when people do their groceries. Also, do not disregard the fact that supermarkets have become hubs of amusement and entertainment, for families, too, so closing them would have a multiple negative effect,» Meidė noted.

According to her, there are 940 small businesses, including 147 pharmacies, in Maxima supermarkets across the country.

Radostinas Roussevas-Peinas, the chief executive of Lidl Lietuva, a subsidiary of German retailer Lidl, argued that the best remedy in slashing food prices is through bigger competition.

«When we came to the Lithuanian market two years ago, they dropped. We realise that with 38 shops open across the country we have a considerable impact on local economy and that, with a new shop opened, we thus increase competition, which reduces prices at the end,» he underlined.

Meanwhile, Gerardas Rogas, GM of «Palink», which operates «Iki» supermarkets, mulled that a reduction of VAT on food products would benefit the striving of lesser prices.

«This is essential in the effort,» he accentuated.

Market experts, like Žilvinas Šilėnas, President of Lithuania’s Free Market Institute, are nevertheless sceptic whether the introduction of the PM proposals aimed at reining in food price growth would produce desirable results.

«On one hand, we are talking about increase of competition in the market which would come with the arrival of new food retailers. And on the other hand, we are speaking about helping small vendors. How are these two (strivings) compatible?» questioned Šilėnas. «To my opinion, the plan is raw, little discussed. When hearing our prime minister, I see more reasons for foreign retailers not to come here than enter into our market».

Yet the Skvernelis resolve to curb food prices is music to ears of many Lithuanians, analysts say.

«Indeed, it is a populist thing, but it echoes well with the population,» Bielinis, the analyst, said. «The striving will certainly become one of the basic elements, one very vivid, of his presidential campaign».

«However, the success of his presidential bid is hinged on a lot more things than just prices. Much depends on how far his fight against the retailers would go and how much attention it would generate in media,» the analyst underscored.

Skvernelis is one of the top three presidential contenders in Lithuania, according to Lithuanian polls. Economist Gitanas Nausėda, who has already announced his presidential run, sits on top of the polls. Kaunas mayor Visvaldas Matijošaitis, who did not reveal year his decision for the 2019 election, is second and Skvernelis is third.


Leave a reply

Latvian prime minister expects resolution for Latvijas Radio situation

Culture Minister Nauris Puntulis should offer a solution for the funding problem currently present at Latvijas Radio, said Prime Minister Krišjānis Kariņš.

Latvian government approves funding for procurement of new electrical trains

Latvia’s government has approved state budget long-term commitment of EUR 255 888 753 to finance railway passenger transport company AS Pasažieru vilciens. This means PV might sign a contract with Škoda Vagonka soon, as confirmed by Transport Ministry.

Latvian Railway receives EC’s report on railway electrification

European Commission has submitted a positive report on Latvian Railway commenced railway network’s electrification in the initially planned volume, as reported by company’s representative Ella Pētermane.

Nausėda, visiting Poland, urged to get more personal than Grybauskaitė

Gitanas Nausėda, the new Lithuanian President, is in Poland on his first official visit abroad. Lithuanian political experts have commented to LRT, what should be the aim of the visit.

Latvian State Police request criminal prosecution of fake news portal owner

July 2019 marked the end of State Police investigation of a criminal process launched last year in relation to distribution of fake news. One Niks Endziņš was arrested as a result of the criminal process in 2018.

Moscow considering exchange of Ukrainian sailors before Ukraine election

Moscow has unveiled it’s taking part in discussion over a potential prisoner swap involving Ukrainian sailors that it arrested in 2019 last year. The development comes on the week of Ukrainian parliamentary elections.

Latvia to host EUROfusion General Assembly for the first time

The 26th EUROfusion General Assembly will be taking place in Riga this week 17th – 18th July. The heads of EUROfusion science project and participants from 24 countries will be taking part in this event.

Bribery accused LU vice-rector applied with major restrictions

Latvian Corruption Prevention and Combating Bureau has applied restrictions for bribery accused University of Latvia vice-rector Baiba Broka. She is prohibited from working in the university’s procurement commission, as well as making decisions associated with control and supervision.

EU: Violations of Iran nuclear deal can still be reversed

European Union’s foreign ministers have concluded in a meeting on relations with Iran that the uranium enrichment carried out by Tehran breaching the Iran nuclear deal this summer is not significant.

Welfare Ministry requests EUR 54 million for welfare priorities in Latvia

Next year’s welfare priorities in Latvia will require additional funding of EUR 54 million, says Welfare Minister Ramona Petraviča.

Von der Leyen resigns as German minister before EP vote on her heading EC

Shortly before the Tuesday’s vote in the European Parliament on the candidacy of Ursula von der Leyen, the German Defence Minister has announced her resignation from the German federal government.

Pork prices in Latvia increase 10.5% over the course of a month

In May 2019, pork prices in Latvia increased 10.5% when compared to April and were 33.1% higher when compared to May 2018, according to data compiled by Latvian Agriculture Ministry’s Market and Direct Support Department.

Latvia’s finance market supervisor applies one million euro fine to Rigensis Bank

Latvia’s Finance and Capital Market Commission has decided to apply a fine of one million euros to Rigensis Bank AS for violating money laundering and terrorism financing prevention regulations, as confirmed by the commission.

Latvia’s Competition Council issues six warnings for possible cartel activity

In the first half-year of 2019, Latvia’s Competition Council organized six warnings to ten businesses and five private persons for possible involvement in cartels.

Estonian expedition Antarctica 200 leaves for six-month journey

Marking 200 years since the discovery of the Antarctic, a group of Estonian-lead explorers have left for the six-month sea journey to the world’s southern-most continent.

Balticovo: eggs of caged hens will gradually disappear from shelves

Eggs from caged hens will likely disappear from Europe’s shelves in time, predicts egg and egg product manufacturing company Balticovo council chairman Valdis Grimze.

Latvia’s Taxi Drivers Register has around 6 000 drivers; 114 have been excluded from it

Since June 2018, when the Taxi Drivers Register was adopted, nearly 6 000 drivers have registered with it, whereas more than 100 drivers have been excluded from it, as reported by the Road Transport Directorate.

President: Latvianness is intended for everyone

Latvianness is intended for everyone, said Latvia’s President Egils Levits in an interview to public broadcaster LNT programme 900 seconds in regards to ways of reducing societal split.

Deadly plane crash in Sweden could take year to be solved

After Sweden’s leisure plane crash that took the lives of nine people over the weekend, authorities could take a year to determine the cause of the tragedy.

Fifth break announced in trial of Jelgava Hospital bribery case

The trial in the bribery case involving Jelgava Hospital manager Andris Ķipurs has been put on hold for the fifth time, the court reported.

Von de Leyen seeks to secure MEP support to head European Commission

Member state nominee for the top job of the European Union, Ursula von der Leyen, has spent two weeks seeking to ensure support from members of the European Parliament to her candidacy to the post the president of the European Commission.

Warmth to gradually return to Latvia this week: upwards of +25 C expected

This week, rain will be observed in at least one of Latvia’s regions. Nevertheless, warmer masses of air will also flow into the country, making air temperature reach +25° C.

NATO’s right to deploy in Latvia in crisis situations to be outlined in legislation

In the event of crisis situations NATO forces will be able to deploy in Latvia from beyond its border, as provided by amendments to the Latvian State Border Law the government will discuss on 16 July.

Trump’s war powers on Iran limited by U.S. Congress

U.S. President Donald Trump’s powers to potentially take his country to war with Iran have been blocked by American legislators setting forth congressional authorization to such a move. Tensions between the to countries have escalated since early June.

Week in Lithuania: Nausėda, a new President, inaugurated, Skvernelis stays as PM, mayor handcuffed

Last week, Kaunas marked 75th anniversary of ghetto liquidation, Nausėda presented his team, MPs initiated simpler MP mandate revocation procedures.