Latvia ready for extreme measures: Government may slap price floor on Lithuanian eggs

  • 1999-03-04
  • Anastasia Styopina
RIGA - Lithuania should scrap the minimum price floor on imported agricultural products immediately, Riga says. Otherwise, the Latvian Cabinet of Ministers will introduce the same measure to keep Lithuanian products off the market here.

This will be Latvia's demand when a special joint committee dealing with problems of the Baltic Free Trade Agreement meets in Vilnius March 5.

At the beginning of the year, Lithuania set minimum prices on imported foodstuffs which it uses to calculate customs duties and taxes. Most of the fixed prices are above the market price level rendering imports uncompetitive on the Lithuanian market.

Both Latvia and Estonia protested against this practice, claiming it violates the free trade agreement, but no compromise has been reached yet. The last joint committee meeting Feb. 17 brought little change to the situation.

This time the Latvian government is playing tough. It ordered the Finance and Agriculture ministries to prepare a draft act imposing the same measures against Lithuanian producers.

Price regulation was especially painful for Latvian egg producers, who had to stop exports to Lithuania. While local producers seized their exports, Lithuanian exported 9 million eggs to Latvia in January.

In an earlier interview with TBT, Valdis Grimze, director of Balticovo, the largest Latvian egg company, said the export issue would not be that pressing if local producers could sell their products on the local market.

"I need Latvia's market. We export to Lithuania because there is no place on our market," Grimze said, noting that the Latvian market is flooded with cheap Lithuanian eggs of low quality.

Latvian egg companies sent a letter to various ministries in February asking them to stop Lithuanian import. Among the reasons they mentioned: The country's southern neighbors often fail to comply with Latvian veterinary standards, and imported eggs are often outdated.

This proved to be true last week when the Latvian Veterinary Service banned egg imports from two Lithuanian producers, Buktos Paukstinas and Vivio Paukstinas.

The veterinary service claims the two companies do not wash and disinfect eggs, and eggs are sometimes infected with salmonella.

Latvia's move caused immediate reaction in Estonia predicting a sudden increase of Lithuanian egg exports.

"Due to Latvian restrictions, Estonia is going to suffer," Kai Rimmel, marketing director of the Tallegg company, told the Baltic News Service. Tallegg is Estonia's largest poultry farmer and egg producer.

"Lithuania will be unable to sell 9 million eggs in Latvia. This means that the flow of Lithuanian eggs into Estonia will grow," Rimmel said.

The Estonian government has not announced any radical demands yet.

Latvian egg producers are a little skeptical whether their government's threats are going to work.

"Lithuania would not repeal the minimum prices; if they did, they would create other obstacles preventing import of agricultural products to Lithuania," said Mairis Reidzans, Balticovo's sales and marketing manager.