Head of the agricultural market promotion department, leading researcher Inguna Gulbe
She emphasized that prices increased for everyone – both producers and traders. In addition, the markup for Latvian products is now higher than for imported products, and the requirements for our producers are also stricter.
“It seems inconsistent to me that our traders are worried, sympathize with global and very necessary issues about the environment and animal welfare. They are worried whether the chickens are not too tight in the cages, but less about the Latvian producer and the people who work there [uztraucas]” said Gulbe.
However, the rise in the prices of food products has stopped at the moment – everyone should feel it, even the producers feel it, because they are being asked to reduce prices in supplies, the researcher continued.
“Compared to last year, quite significant price changes have taken place at the moment – some products have become more expensive, such as coffee, tea, bananas, orange juice, olive oil, but some have also become cheaper, such as sugar, sunflower oil, a large number of dairy products,” said Gulbe.
The rise in prices, as it is now, should stop, because despite the fact that many things are cheaper, including electricity, various processes have taken place that have increased the price again, for example, the conflicts in the Strait of Babelmandeba, the increase in wages.
“Not the price for each food product, but the current price level should remain,” assessed Gulbe.
She also admitted that there is not equal market power between producers and traders, and this is not only a problem in Latvia. “The manufacturer is not equal in negotiations with the dealer, because there are many manufacturers, but few dealers. “We practically have only two very serious [mazumtirdzniecības veikalu] chains, then “Lidl” came in, and the rest are small traders,” said Gulbe.
Therefore, in her opinion, state involvement would be needed to promote competition and improve the business environment. “But I’m not convinced that only the Ministry of Agriculture can do it. (..) It could be the government’s overall task to promote a favorable business environment so that retail chains are interested in entering Latvia,” said Gulbe.
In addition to that, Latvian producers should also be supported so that they can compete with foreign producers. “Intervention to some extent is necessary,” concluded Gulbe.
