As a result of actions of the authorities in Latvia, the demand for native fruit and veggies has fallen sharply

A survey of native producers confirmed that there was a pointy decline within the consumption of native merchandise, whereas supermarkets have seen a major improve within the provide of imported merchandise. Some producers reported that enormous portions of tomatoes and cucumbers grown in Latvia had collected in warehouses as a result of grocery store chains most popular to supply imported merchandise to clients.

One of many arguments of the Ministry of Finance when growing the VAT price on Latvian fruits, greens and berries from 5% to 12% was to restrict the inflow of imported merchandise. “Solely with the beginning of the season does it grow to be clear that the objective has not been realized, the alternative has occurred,” Tronce mentioned. Now less expensive imports are offered in supermarkets at costs that the native dealer can’t provide.

“Everyone seems to be shedding now. Purchaser, as a result of the vary of home manufacturing in supermarkets has decreased. The producer suffers heavy losses. Nation, as a result of when buying imported merchandise, state taxes are paid at the least thrice lower than for merchandise of the identical quantity and value equal in Latvia. Subsequently, the abolition of the decreased VAT price of 5% might be known as a short-sighted choice, as a result of the present scenario is a consequence of this lack of ability to transcend the excel sheet and hearken to the forecasts of farmers,” farmers say.

Furthermore, many Latvian producers, regardless of the rise within the VAT price, didn’t improve the value of their merchandise. On the identical time, supermarkets in Latvia are benefiting from the scenario by imposing important markups on meals merchandise.