Food price cuts could become visible within two weeks - Valainis

RIGA - The reduction of food prices could be reflected in real prices within two weeks, Economics Minister Viktors Valainis (Greens/Farmers) said on Tuesday at the signing of a memorandum on food price cuts.

At the same time, introducing a tool for food price comparison will take longer.

The memorandum on food prices reductions was signed on Tuesday at the Ministry of Economics.

The memorandum was signed by Valainis, Noris Kruzitis, executive director of the Latvian Food Traders Association, Janis Endzins, chairman of the Latvian Chamber of Commerce and Industry, and Janis Solks, chairman of the Latvian Dairy Committee.

The memorandum was also signed by Inara Sure, chairperson of the Council of the Latvian Federation of Food Enterprises, Guntis Gutmanis, chairperson of the Latvian Agricultural Organisation Cooperation Council, Juris Lazdins, chairperson of the Association "Zemnieku saeima", Zaiga Liepina, director of the Consumer Rights Protection Centre, and other partners.

The memorandum foresees the introduction of a low-price food basket, a price comparison tool and the promotion of locally sourced products in grocery stores.

The low-price food basket will consist of at least one product in each of the 10 categories with the lowest price and will be exchanged for other products in the same category with some regularity.

Valainis said that the price comparison tool would encourage competition among food retailers. It would work by retailers sending information on the lowest prices to the Central Statistical Bureau (CSB), which would publish them on a daily basis. The data would be available to various price comparison tools and would be published on the website of the Economics Ministry.

The launch of the price comparison tool, however, requires amending the Consumer Rights Protection Law to oblige traders to provide the food price data to the CSB.

Valainis said that representatives of Denmark's Salling Group, the new owner of the retailer Rimi, had said that the introduction of the price comparison tool in Denmark had reduced food prices by 17 percent and had also reduced inflation in the country.

The memorandum also provides for campaigns to promote local food products.

Valainis said that the Economics Ministry and institutions subordinated to the ministry "will start monitoring the situation from day one so that some conclusions can be reached".

The economics minister also pointed out that the ministry has been working on food price reduction measures since November and that it has been an intensive process, during which the Economics Ministry has been working with the Competition Council, the Consumer Rights Protection Centre and the Agriculture Ministry on solutions to reduce food prices.

The Economics Ministry's goal is to achieve a 20 percent price reduction for the most essential food groups, as well as to increase the share of Latvian-made food products in stores.

Initially, the Economics Ministry had proposed amendments to the law, but the industry offered to achieve the result on its own, and "from the point of view of the Economics Ministry, it makes no difference whether these are legislative amendments or the retailers' own initiative," said Valainis.

Agriculture Minister Armands Krauze (Greens/Farmers) said that the Agriculture would also follow the implementation of the memorandum.

Endzins, chairman of the Latvian Chamber of Commerce and Industry, said that both food retailers and producers believe that it would not be right to attempt to regulate food prices by law, so the signing of the memorandum is a logical solution.

The signatories to the memorandum include around 75-80 percent of market players, including Top!, Elvi Latvija, Aibe, Narvesen, Maxima, Lidl, Rimi and others. At the same time, the Economics Ministry continues to work with those retail chains that have not joined the memorandum.