Consumers Want Reduced VAT to Cover a Wider Range of Dairy Products

In the first days after the implementation of a reduced value-added tax (VAT) rate on four basic food groups – bread, milk, poultry, and eggs – from July 1, retailers have observed an increase in sales. The Latvian Food Retailers Association (LPTA) reports that the highest consumer interest has been for milk.

At the same time, consumers are questioning why the reduced rate does not apply to a broader range of everyday dairy products, such as cottage cheese and sour cream. According to the LPTA, the introduction of the reduced VAT rate has generally proceeded smoothly, without significant technical or organizational complications. Retailers completed the necessary preparations in a timely manner, and the tax reduction has already been reflected in the final prices of the relevant goods. The Consumer Rights Protection Centre (PTAC) has also been active in monitoring prices in stores.

The LPTA believes that after the initial implementation period, not only price changes but also consumer demand data and the clarity of the product range should be evaluated. If the data confirm a positive impact on accessibility and consumption, consideration should be given to extending the reduced VAT rate to a wider range of staple products. Furthermore, the initiative should be continued in the long term, rather than for just one year as currently planned – the reduced rate is in effect until June 30, 2027.