Checks carried out by Latvia's Domestic Market Protection Bureau revealed that Lithuanian milk is being dumped on the Latvia market, leading bureau officials to conclude that penalties should be applied on imported milk from Lithuania.
In its decision, the bureau recommended that an additional payment of 0.03 lats (0.05 euros) per one kilogram should be applied to Lithuania's Panevezio Pienas, while for Zemaitijos Pienas and Pieno Zvaigzdes Mazeikiai the payment should be 0.06 lats.
According to the law, Lithuania's dairy producers have 30 days after the publication of the bureau's decision to file a request for a hearing on the decision.
A final decision on the application of protection measures will be made by the Latvian government, bureau head Astrida Tjusa said. The maximal term for the penalties - described as "temporary protection measures" - is six months.
Tsuja said a decision on whether permanent protection measures were to be imposed would be made in three months.
While carrying out the probe, the Domestic Market Protection Bureau found that milk is imported from Lithuania at dumping prices, causing local dairy producers to get squeezed out of the market. This, said Tsuja, will have a negative impact on Latvia's long-term economic development.
Regardless of the fact that imported Lithuanian milk accounted for just 1.1 percent of Latvia's market during the checks, the bureau concluded that imports would be higher if local producers had been unable to retain low prices amid the competition.
The dumping probe lasted from Apr. 1, 2001, through Mar. 31, 2002. Financial losses of local manufacturers and import development trends were assessed during the period from January 2001 through the first half of January 2003. The checks were carried out concerning pasteurized milk with fat content of 1 percent to 3 percent, packed in no bigger than 1.49 liter packaging and with a validity term no longer than 30 days.
The checks also assessed the milk purchase price in both Latvia and Lithuania, as well as the retail price for milk and other factors.
The checks were carried out after Latvia's dairies central union and largest milk producers turned to the Domestic Market Protection Bureau in 2001 asking to assess possible price dumping of Lithuania's dairy products in Latvia.
The Lithuanian Foreign Ministry said Jan. 21 that is discussing possible reactions to any anti-dumping duties on Lithuanian milk, and that it does not rule out taking counter-measures if duties are applied.
"We will recommend a full range of measures to the government," Albinas Zananavicius, head of the ministry's Foreign Trade Policy Division, said.
He said both Lithuania and Latvia must respect their international commitments. If it is decided that Latvia has violated the World Trade Organization's anti-dumping rules, a complaint against its actions could be filed with the international trade body.
Zananavicius said Lithuania could also take actions provided for in the free trade agreement between Lithuania and Latvia, which may possibly involve increasing existing duties.