Food retailers and farmers invite Latvian government to reduce VAT for dairy products

Latvian Food Retailers Association (LPTA) and Latvian Agricultural Organization Cooperation Council (LOSP) agreed during a joint meeting to invite the government to reduce VAT for dairy product during the period of a crisis, as confirmed by representatives of both organisation.
LPTA members, among which are retail brands such as Aibe, Narvesen, Rimi, Top!, and LOSP, which unites 54 NGOs representing farmers and serves as the leading association representing dairy farmers, discussed the reasons for the ongoing crisis in the food sector and its possible solutions. Although milk producers and food retailers have no direct cooperation contracts and milk producers sell their product to milk processing plants, both sides have agreed on the most important steps to help assist with sales of locally-made products.
«Retailers confirmed they understand the difficult situation Latvian farmers are in. At the same time, they confirm making payments in full and on time, accepting price fluctuations. Payments to farmers are the responsibility of processing companies. Farmers who aren’t paid in full for their products have to take it up with the processing companies that purchase the milk. It is in their hands and it is their responsibility to pay farmers,» stresses LPTA executive director Noris Krūzītis.

«Farmers can see the end price of milk sold on store shelves even when they are not paid for milk in full.

Such talks in the production-processing-sale chain help those involved to better monitor problems and come up with solutions,» LOSP board chairman Guntis Gūtmanis comments on the meeting with food retailers.
To fully understand the situation and prevent any misleading conclusions, it is necessary for all members of the chain to meet – producers, processors and retailers. LOSP is grateful to LPTA members whose assortment of sold goods consists of a large number of locally-made products.

LPTA members confirm their preparedness to promote locally-made dairy products and participate in various activities intended to sell more locally-made products.

«Studies show that buyers would rather buy locally-made products, but for various marketing-related reasons they are often unable to differentiate between imported and local products,» said G. Gūtmanis.
Retailers’ representatives outline that another important topic is the competitiveness of Latvia’s dairy industry. This means it may be possible to improve positions of the local dairy market by modernising and consolidating Latvia’s milk processing industry.
Both LPTA and LOSP believe reduction of VAT on dairy products would be a useful tool to help out Latvian milk processing companies during the crisis.
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