The Latvian Traders Association (LTA) reports that, according to the latest available data, the value of Latvian businesses’ frozen funds and goods tied up in the closed MERE retail chain—operated by SIA LATPRODUKTI and the Latvian branches of UAB Valiente—has reached 1.52 million euros. Ten manufacturers and wholesalers have already approached the LTA for assistance.
To recover its funds, a company must first agree its claim with the management of the closed MERE chain, after which MERE must request permission from the Financial Intelligence Unit (FIU) to make the specific payment. Other businesses will be able to recover their money and goods only after the final inventory has been completed, which in practice is unlikely to happen in less than a week. It also remains unclear to what extent MERE will be able to meet its financial obligations and what will happen to any outstanding debts.
The most serious problem at present concerns the physical return of goods. As the question of whether these products may subsequently be resold on the Latvian market remains unresolved and is still being discussed with the Food and Veterinary Service (PVD) and the Ministry of Agriculture, suppliers have effectively been left in a deadlock.
“The government is currently forcing Latvian suppliers to play a dangerous financial gamble and choose between two enormous risks. First, a business can take the risk of retrieving its unpaid goods, but until permission is granted to sell them elsewhere, the products could simply rot in warehouses, resulting in a 100% loss. Second, the business can take the risk of leaving the goods behind and naively hope that the sanctioned Russian retail chain will eventually complete the necessary paperwork and pay for them. Such a legal vacuum created by state institutions is unacceptable,” said LTA President Henriks Danusēvičs.
Tonnes of food products, including meat, eggs and other perishable goods, are reportedly rotting and spoiling at the closed stores.
Due to existing administrative restrictions, the products cannot even be donated to charities, resulting in what the LTA describes as unjustifiable food waste.
The LTA has also received information from the retail chain’s management that employees are not being paid because the FIU has indicated that the return of goods is currently the priority.
According to the association, a discriminatory arrangement has been imposed on hundreds of employees who have been left without an income. Under the current rules, employees of the closed stores may immediately receive the wages they have earned only if their employment contracts were concluded by the 31st of December, 2024.
Employees who began working for the company after that date must submit an individual application to the FIU and wait for approval before they can receive the money owed to them.
The LTA says its pressure has already resulted in a first legal breakthrough:
the FIU has officially provided application forms allowing legitimate owners acting in good faith to reclaim their goods.
LTA President Henriks Danusēvičs is currently holding urgent talks with the Ministry of Agriculture and the Food and Veterinary Service on introducing a special force majeure arrangement that would allow recovered goods to be placed back on the Latvian market immediately and safely, while maintaining the lowest possible prices for consumers.
The LTA also said discussions are underway with the FIU and other competent authorities to ensure that MERE employees and suppliers are paid as quickly as possible.
The association recalled that as recently as the 27th of February this year, the FIU stated in an official letter that the retail chain was operating legally and was not subject to sanctions. According to the LTA, employees signed employment contracts and suppliers delivered goods in full reliance on the information provided by state authorities.
The LTA is calling on Prime Minister Andris Kulbergs to immediately put an end to what it describes as “bureaucratic nihilism” and introduce a unified, fair and state-level mechanism to ensure both the immediate return and resale of goods and the payment of wages owed to all employees.
Read also: LTA: Closure of MERE exposes government double standards and hypocrisy