Minister of Economics Viktors Valainis has five possible solutions on the table to help lower food prices, as reported by the minister’s advisor for communication Katrīna Iļjinska.
The coalition will continue reviewing the minister’s suggestions in the second half of November. The ministry, meanwhile, will continue working on necessary legislative amendments.
The option to set a ceiling for everyday food products will be considered as well. The essence of the proposal is to limit retailers’ freedom in regards to price-making. A mark-up limit threshold would be set for everyday food products.
The ministry notes that the option of setting lower prices in each food products category will be considered. The proposal provides for defining the everyday consumer goods basket in which, for each category of goods, the retailer is free to choose at least one product within their retail network of choice for which the lowest price on the market will then have to be determined.
The introduction of a digital commodity price comparison tool is also considered, thus exacerbating retailers’ competition for the consumer and having a positive impact on pricing policy.
The possibility of banning the destruction of unsold food products is also considered. A ban on retailers disposing of unsold food products, which encourages retailers to donate or sell surplus products at a reduced price, making the items more accessible.
The ban on excessive and lasting discounts on food products in order to stabilise consumer prices is also assessed by the ministry.
According to Iļjinska, the minister’s plan has multiple objectives.
The primary goal is to ensure that Latvian residents do not have to overpay for basic necessities. It is also necessary to eliminate different pricing attitudes between domestic and imported groceries, as well as to balance the relationship between the participants in the grocery supply chain so that manufacturers do not have to sell goods at an inappropriately low price or below cost.
In order to balance the relationship between producers and traders, and to prevent traders from treating producers differently, the “Prohibition of Unfair Trading Practices Law” should be amended to clarify what constitutes an unfair trading practice, to prohibit the supplier from requesting a purchase price that is below or close to the producer’s cost price, and to make other amendments. The liability of traders for breaking the law should also be strengthened to around 4% of net turnover, as mentioned by Iļjinska.
The Ministry of Economics has compiled data, stating that households in which income is EUR 236 per person spend nearly 30% of their income on non-alcoholic beverages, whereas households that receive EUR 324 per person spend more than 25% of their income on non-alcoholic beverages.
On Monday, the 4th of November, parties of the ruling coalition agreed to work to lower prices in supermarkets.
New Unity Saeima faction leader Edmunds Jurēvics told journalists that there were big discussions about food prices in supermarkets, adding that he believes there are signs of cartel activity in Latvian supermarkets. “We can see there are unjustifiably high food prices,” he said.
The Ministry of Economics may prepare an offer to determine the maximum level of food price mark-up by the end of the year.