Food prices in Latvia may begin to drop in real terms within two weeks, Economy Minister Viktors Valainis (ZZS) said Tuesday at the signing ceremony of a memorandum on reducing food prices.
However, implementing a food price comparison tool will take longer.
The memorandum was signed at the Ministry of Economics (EM) by Minister Valainis, Noris Krūzītis, Executive Director of the Latvian Food Retailers Association, Jānis Endziņš, Chairman of the Latvian Chamber of Commerce and Industry and Jānis Šolks, Chairman of the Central Union of Latvian Dairy Farmers.
Other signatories included Ināra Šure, Chair of the Latvian Food Companies Federation, Guntis Gūtmanis, Chairman of the Agricultural Organizations Cooperation Council, Juris Lazdiņš, Chairman of the board of the Farmers’ Parliament, Zaiga Liepiņa, Director of the Consumer Rights Protection Centre and other partners.
The memorandum outlines the introduction of a low-price food basket, a national price comparison tool, and measures to increase the share of locally produced goods in stores.
The low-price food basket will include at least one product in each of 10 categories, guaranteed to be the lowest-priced item in its category.
Products in the basket will be regularly rotated with other items in the same category.
Valainis emphasized that the price comparison tool will promote retailer competition. Retailers would be required to submit daily price data to the Central Statistical Bureau (CSB), which will then publish the data. The information will be accessible to price comparison platforms and on the Ministry of Economics website.
However, implementing this tool will require amendments to the Consumer Rights Protection Law to obligate retailers to provide data to the CSB, thereby enhancing market transparency and competition.
Valainis noted that in Denmark, where retailer Salling Group operates (owner of “Rimi”), the introduction of a similar comparison tool led to a 17% drop in food prices and helped reduce inflation.
The memorandum also includes plans to promote locally produced food.
Valainis stated that the Ministry of Economics and its agencies would begin monitoring the situation immediately to assess the impact.
The ministry has been working on food price reduction measures since November 2023 in collaboration with the Competition Council (KP), the Consumer Rights Protection Centre (PTAC), and the Ministry of Agriculture (ZM).
The goal is to reduce prices by 20% in key food product groups and increase the share of local products in stores.
Although the ministry initially proposed legislative amendments, industry stakeholders suggested achieving the goals through voluntary cooperation. “From the EM’s perspective, it doesn’t matter whether the result comes from legislative changes or the initiative of retailers themselves,” said Valainis.
The Ministry of Economics has committed to overseeing the memorandum’s implementation and has promised to postpone proposed amendments to the Unfair Trading Practices Prohibition Law if the memorandum achieves its goals.
Agriculture Minister Armands Krauze (ZZS) confirmed that the Ministry of Agriculture would also monitor compliance with the memorandum.
Chamber Chairman Jānis Endziņš stated that both retailers and producers believe legislation should not interfere in price-setting, and signing the memorandum was a logical alternative.
Initially, aligning lower prices with increasing local content in stores seemed incompatible, Endziņš noted, but workable solutions have been found.
It was also essential to ensure the agreement does not violate competition law—KP confirmed the memorandum complies with regulations.
The memorandum includes organizations representing around 75–80% of the market, including top!, Elvi Latvija, Aibe, Narvesen, Maxima, Lidl, Rimi, and others. The ministry is still negotiating with retailers not yet included.
Endziņš added that major retailers are awaiting the 28th of May decision from the Saeima’s Economic, Agricultural, Environmental, and Regional Policy Committee on whether to proceed with amendments to the Unfair Trading Practices Law. Retailers are ready to meet the memorandum’s goals provided no new legislation is introduced.
A sociological survey will measure whether consumers notice the low-price food basket in stores and whether their loyalty to local products changes.
In March, the Saeima’s Economic Committee asked the Ministry of Economics to revise the proposed amendments due to constitutional concerns raised by the Parliament’s Legal Bureau.
The proposed bill aimed to promote fair trade practices, ensure equal competition in food retail, and balance relationships where economically dominant buyers unfairly exploit suppliers.
The amendments would introduce a ban on discriminatory practices by buyers, ensuring equal treatment and comparable terms for similar products. They also sought to clarify existing unfair practices, restrict unilateral contract changes, and raise penalties up to 4% of annual net turnover, with a minimum fine of 700 euros.