Latvian Federation of Food Enterprises invites halting scandalous army food supply procurement

Latvian Federation of Food Enterprises (LPUF) invites halting the army food supply procurement worth EUR 200 million. According to LPUF, it will not achieve established goals. The organisation putting the project on hold until a new procurement has been developed and coordinated with the food industry, as reported by LPUF Council chairperson Ināra Šure.
«More than 800 locally-made food products are marked with Green and Bordeux spool label. Which means they meed increased quality requirements. But now

the procurement presents another very expensive mediator,

and it seems that instead of high quality locally-made food products, our troops will have to make do with low-quality imported food products,» said Šure. She suspects the contract as it is will not be completed. Because, as far as the federation is concerned, there isn’t a single contract signed with local producers for the creation of food stores for «hour X».
She also stresses that the green public procurement was that only in words, whereas in reality there are no green requirements mentioned anywhere in the procurement.
«The result is that

food companies consider ceasing their participation in the food procurement for army needs,

because the new procurement model meets neither their interests nor principles of honest commercial operations and competition,» explains the head of LPUF Council.
At the same time, LPUF notes price announcement and publication on websites is not allowed, as prices are commercial secrets not to be disclosed to competitors. LPUF explains that a publicly accessible price list would create problems for cooperation with various trade networks. Publication of prices and racing towards the lowest possible price would cause price dumping and a victory for low-quality products.
LPUF explains that food companies adapt their production volumes to the orders they receive, and this sector’s is characterised by limited shelf life of products and raw materials. Raw materials for army products have to be procured ahead of time and in large volumes.
«What will happen to produced goods and stores of raw materials, if the supplier is replaced after three months? The are many unanswered questions in the context of this procurement. Contract projects also list inadequately high penalties. This is why we understand the producers that refuse to cooperate as part of this project,» said Šure.
She also stresses that it is unclear

how a company that has no warehouses could win in this procurement.

This includes warehouses fitted with special temperature regime. Šure is concerned about who is supposed to cover transport and storage costs until «hour X».
At the same time, Šure reminds that the Defence Ministry and LPUF share a cooperation agreement for supplies of locally-made products for the needs of the army. Therefore LPUF invites the ministry to immediately halt the aforementioned contract and start working on a new procurement, one that will include the industry and comply with fair commercial practices, as well as beneficial to the state and producers.
As it is known, in December 2022 Roja-based company Zītari LZ won the rights for the contract worth EUR 220 million. The contract details the supply of food products for the needs of Latvia’s National Armed Forces for a period of five years.
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