Sugar prices pushing higher

  • 2011-01-13
  • From wire reports

RIGA - Due to the value-added tax (VAT) rate increase and several other reasons, prices for sugar, milk and sweets will soon increase, according to several Latvian supermarket chains, reports “The prices on world markets are at an all-time high, higher than in 2010, and this will most likely affect the prices in Latvia,” says Maxima Latvija’s press secretary Ivars Andins.

“It is difficult to single out which prices increased exactly due to the higher VAT. Since the beginning of this year, the prices increased for only 1.2 percent of our goods, the prices for the remaining 98.8 percent are still the same,” pointed out Andins who added that the situation can change.

According to Andins, the wholesalers have already increased the sugar price by 10 percent, and the retailers will not be able to hold the price at the same level as now, that it will increase in January. “Sweets manufacturers have already felt the sugar price increase and warn that they will also hike their prices,” said Andins.
The dairy producers are also raising the prices. “Starting [Jan. 12], the price for dairy products will be higher, thus continuing last year’s tendency, when various dairy producers raised their prices several times a year by 4 to 15 percent at a time,” said Andins.

He also forecast that egg and poultry prices can also grow due to the increasing grain prices, while buckwheat prices, which were significantly increased last year, will most likely drop. He also expects that it is difficult to forecast at the moment whether the producers will include VAT increases for electricity, excise tax increases for fuel and other expenses in their prices.
Rimi Latvia Senior PR Specialist Dace Valnere said that the VAT increase did not significantly hike supermarket prices. “The prices were raised correspondingly to the VAT, and prices for several goods were individually evaluated and we even considered the possibility not to raise the price on some goods,” said Valnere.