In brief - 2004-04-29

Latvian bakeries believe that after joining the EU, eating habits will not change and Latvians will still prefer locally baked bread. Consumer demands, though, may rise.

Inese Mikelsone, marketing director for Finland's Fazer-owned bakery Druva, said that "bread will remain a local market product" for people with specific tastes, and only Latvian bakeries could understand local consumers. She did admit that the international range of products may broaden. No bread from abroad is expected to flood the Latvian market once trade borders open, said Normunds Skaugis, owner of Laci bakery.
According to Hanzas Maiznicas CEO Gaidis Gaspazins, although no dramatic market changes are expected, a few of the smaller bakeries could disappear. He added that Latvians consume an average of 86 kilograms of bread per year. Latvian bread prices are currently the lowest in the EU, with bread costing around 2.5 to 3.5 euros per kilo in various EU countries, while the cost in Estonia is 0.97 euro per kilo, in Lithuania 0.70 euro per kilo and in Latvia only 0.69 euro per kilo.

The European Commission granted a transition period for two Latvian egg producers until May 1, 2007, by which they must equip their plants according to EU requirements, reported the Agriculture Ministry. The two companies, Balticovo and Sidgunda 2, will be allowed to do business on the Latvian market until conditions at the plant are improved, including raising the height of chicken coops to at least 40 centimeters. Balticovo is the largest egg producer in Latvia, posting a turnover of 7.1 million lats (10.6 million euros) in 2002. Sidgunda 2 posted a turnover of 461,000 lats the same year.
An influential EU official promised Lithuania that it won't force the country to change its tax system but dashed hopes of winning exemptions from rules for trade with Eastern countries.According to Lietuvos Zinios, EU Trade Commissioner Pascal Lamy told Lithuanian officials and businesspeople that the EU does not intend to levy additional taxes on private individuals nor introduce uniform rates for basic taxes throughout the bloc. The EU applies custom duties on raw material imports from member sates, which means that prices for building materials, chemical products, steel and other commodities are likely to go up in Lithuania.

Upon EU accession, Lithuania's Parliament is being urged to pass a law on pharmaceutical activities on a priority basis to allow imports of medicines from third countries, the business daily Verslo Zinios reported. Pharmaceutical importers said that it would take another half-year for them to obtain licenses after the law is passed. Lithuanian companies will not be able to import medicines from countries that aren't members of the European economic erea. The Association of Pharmaceutical Wholesalers said that the import ban would apply to around 400 medicines registered in Lithuania.

Estonia intends to ask the EU not to apply the requirement of having whale and porpoise observers on board ships fishing in the Baltic Sea. The EU requires that observers, who will be paid from the state budget, must be placed on all ships more than 15 meters in length and present on 5 percent of the fishing trips. Officials have argued that placing observers on ships fishing in the northern parts of the sea is unnecessary since the mammals don't normally surface there. If the EU rejects the application, problems will arise both with implementing and funding the observer scheme, the government said. The estimated initial cost of the plan is 6 millions kroons (383,400 euros) - 7 million kroons a year. Finland, Sweden and Latvia were also against the decision.

In an agriculture market development study, the European Commission concluded that the situation will improve among new EU member states and the average income of farmers could grow by 35 percent in the mid-term. Experts contribute the development to the implementation of a common agricultural policy and opportunities offered by the European single market. Estimates show that with 10 new members, the area of agricultural land in the EU will expand by 38 million hectares and the output of products could grow by 10 percent - 20 percent.
Latvia's Finance Ministry closed the first agreement with the Central Finance and Agreement Agency on introduction of the country's highway development program until 2006.
The agency could sign a contract with the Transport Ministry next week. The program's total projected cost is 51.7 million lats (79 million euros), of which 32.9 million lats will be co-financed. Latvia will receive 368.9 million euros from the European Regional Development Fund until 2006, for which 121.7 million euros cofinancing will be needed from Latvia.

After the EU and Russia sign a protocol expanding the Partner-ship and Cooperation Agreement to new members, the trade regime of Lithuania and Russia will not change, Foreign Minister Antanas Valionis said. The protocol, stipulating Russia's commitment of the agreement to all EU members as of May 1, will be signed on April 27. The text would set forth a compromise acceptable to all states, Valionis said.

The Estonian Environment Ministry announced its distribution of permitted limits of greenhouse gas emissions for 2005 - 2007. The permitted limit of emissions is 62 million tons, to which a state reserve of 1.9 million tons is added. The ministry said the provisional distribution agreed with EU regulations and that the quota sale could possibly earn millions of kroons for investment in production modernization and emission reduction. In accordance with the Kyoto Protocol, Estonia must reduce greenhouse gas emissions to 34.2 million tons a year in 2008-12.

Estonian architects will be left out of a major design tender connected with Tallinn Airport, because of the EU's preference for big companies, the Aripeav daily reported. Early this year the airport announced an 8 million kroon (511,000 euro) procurement tender for the design of a passenger terminal extension with the requirement that the designer's annual turnover must amount to 15 million euros. The Economic Affairs Ministry, however, said that the requirement was not true. "However, one of the criteria for firms to qualify for the bidding is annual turnover of at least 2 million euros," the ministry said. The largest Estonian design bureau's yearly turnover is 10 million - 20 million kroons a year, the paper reported.