The Latvian Competition Council (KP) has concluded a market surveillance exercise into payment practices in the supply chain for fresh fruits, vegetables, and berries, finding that purchasers frequently use their economic market power to impose unreasonably long payment terms, thereby shifting financial risks onto suppliers.
The investigation assessed compliance with the Unfair Trading Practices Prohibition Law (UTPPL), which regulates commercial relations in the agricultural and food supply chain. The KP found that contractual payment terms do not always comply with legal requirements, particularly where contracts fail to calculate payment deadlines from the date of delivery, as required by law. The authority warned that imprecise contractual provisions increase risks for both suppliers and purchasers.
Beyond contractual shortcomings, the KP identified widespread delays in actual payments. In the retail sector, delayed payments were observed in 8.5% of the transactions analyzed, while in the wholesale sector the figure reached 10.4%. In some cases, payment delays extended from a few days to almost 300 days after delivery. As a result, the KP has initiated several infringement proceedings against purchasers and called on buyers to ensure timely settlements in line with both legal and contractual deadlines.
The KP also highlighted structural weaknesses on the supply side. Latvia’s fruit, berry, and vegetable sector is dominated by small farms, many of which lack adequate storage infrastructure and have limited bargaining power. The authority encouraged growers to strengthen cooperation through agricultural cooperatives to improve efficiency and negotiating conditions.
In addition, the KP found instances where Latvian suppliers faced stricter contractual penalties and insurance requirements than foreign suppliers, raising concerns about unequal treatment. The authority urged purchasers to ensure non-discriminatory conditions in procurement practices.
The KP called on producer associations and public authorities to enhance cooperation, data collection, and monitoring to address unfair trading practices and improve market conditions across the supply chain.