The Ministry of Economics Will Strike Again at High Food Prices 0 17

During the event, an agreement "On the Honest Transfer of VAT Rate Reduction" will be signed to ensure the full reflection of the reduction in the value-added tax (VAT) rate in the final prices in stores.

An addition to the memorandum on the trade of food products will also be signed.

The aim of the supplemented memorandum is to promote the availability of staple foods for the residents of Latvia by expanding the range of products in the basket of cheap goods, improving their recognition and visibility, as well as encouraging a change in consumer habits towards a conscious choice of products from Latvian producers.

The signatories of the memorandum agreed to expand the offer of the basket of cheap goods by adding new products to the already existing ten product categories.

As previously reported, a memorandum on reducing food prices was signed in May 2025. It was signed by the Minister of Economics, the Latvian Association of Food Traders, the Latvian Chamber of Commerce and Industry, the Central Union of Dairy Farmers of Latvia, the Federation of Food Enterprises of Latvia, the Council of Agricultural Organizations Cooperation, the society "Farmers' Saeima" and other partners.

The memorandum provided for the introduction of a basket of cheap products, the creation of a price comparison tool, as well as the promotion of locally sourced products in stores.

According to the memorandum, the basket of cheap products must include at least one item from each of the ten main categories of food products. These categories include bread, milk, cheese, cottage cheese, butter, sour cream, yogurt, buttermilk, fresh vegetables and fruits, pork, poultry, beef and veal, lamb and goat meat, fresh fish, eggs, flour and other grain products, as well as vegetable oils.

At the same time, the Consumer Rights Protection Center, monitoring the implementation of the memorandum and the contents of the basket of cheap products, concluded in February this year that some of the product categories stipulated in the memorandum are often missing from the Latvian baskets of cheap products.

It was also reported that starting from July 1 of this year, a reduced VAT rate of 12% will be established for a number of staple food products, including flour, milk, poultry products, and fresh eggs.

The amendments were adopted to mitigate the impact of rising food prices on the welfare of the population. Changes in VAT regulation are related to the state budget project for 2026 and the budget framework for the following three years.