Riga, April 3 (LETA) - The issue of food prices is a topic that is convenient to talk about loudly, but policy makers do not look into the substance of this issue, Laila Vartukapteine, a member of the board of Elvi Latvija retailer, said in an interview with LETA.

"If we talk about the current populism coming from the political environment and the Economics Ministry, then it is no secret that the culprit must always be found, and at the moment it has been successfully managed. Everyone has found that the trader is guilty. Unfortunately, this is nothing new and has been the case for years," said Vartukapteine.

She rejected the accusation that Latvian products were being marked up more in shops than imported products. The problem is that in large markets, such as Poland, the cost of production is often lower than in Latvia because of the scale of production.

At the same time, Vartukapteine said that the discussions do not focus on the differences between Latvian producers and distributors or intermediaries, including the fact that at the beginning of the year, a large number of distributors had received price increases for the brands they represent on the Latvian market.

"Paradoxically, it is local small producers, such as small bakeries and meatpackers, that have raised prices by up to 5 percent, while large distributors have increased prices by up to 50 percent," said the Elvi representative, adding that relations with small Latvian producers are very good, including cooperation with regional producers who only offer products in their area of operation.

"We are still a relatively small company with a market share of around 5 percent. If a large manufacturer or supplier comes to us with a 50 percent market share in Latvia, who is dominant at that point? We can only listen to what they want and basically we have to agree on everything. By definition, such situations are not assessed," said Vartukapteine.

She also believes that the government's Prohibition of Unfair Trading Practices Law, which is currently put before the parliament, by its very nature only protects one side.

According to Vartukapteine, the adoption of the law in its current form could mean that traders will stop cooperating directly with smaller suppliers of goods in order to avoid potential problems.

"Of course, any law that threatens one party with huge fines is a cause for concern. We will think very, very carefully about how and what to do. This situation is never healthy and will not be conducive to good cooperation, because we will always have to be afraid," said Vartukapteine.

As reported that the government has endorsed the Prohibition of Unfair Trading Practices Law, drafted by the Economics Ministry, which aims to ensure equal competition in the food retail market, as well as to balance cooperation in cases where the economically stronger buyer of agricultural food products takes unfair advantage of this position to the detriment of the supplier.

The ministry pointed out that the provision in the draft law would directly eliminate the differential approach of buyers of agricultural and food products to apply significantly different cooperation and trading conditions, including mark-ups, to goods from one supplier or group of suppliers compared to equivalent goods from other suppliers in comparable transactions.

Saeima still has to adopt the draft law.

The turnover of the Elvi Latvija Group in 2023 was EUR 5.48 million, up 5 percent year-on-year. The company's profit in 2023 was EUR 116,300, up 6.7 percent year-on-year. Elvi operates as a franchisor and franchisee and its franchises are mainly in the regions of Latvia.

Elvi Latvija was registered in 2010 and has a share capital of EUR 1,002,820. Elvi Latvija is owned by Fortis VM SIA (66.88 percent), Imants Rendenieks (33.05 percent) and Realto Capital SIA (0.07 percent), whose sole owner is Alvis Krasovskis.