EXPENSIVE ELECTRICITY: THE LATVIAN MILK PRODUCER HAS NOT COPED WITH THE CRISIS

The company Elpa, which owns a Latvian milk processing factory, has gone bankrupt. The decision on this was made by the Kurzeme District Court. The creditors' financial claims against the firm will be accepted by the court until September 30.

Production at the enterprise was stopped back in May 2022. It is known that the company has implemented a significant part of its production volume within the framework of the program for providing schoolchildren in the Kurzeme region. According to the head of the company Gundars Sisenis, voiced on Latvian radio, the production shutdown was caused by a sharp increase in the cost of raw materials and the high cost of electricity.

The organization itself, commenting on the company's withdrawal from the market, hopes that milk suppliers will not become victims of the bankruptcy process. To do this, the company must pay off the debts for the deliveries made, as it has already been during such trials.

However, electricity prices in the Baltic States continue to rise. In June alone in Latvia, they increased by 33%, which inevitably affects the rise in the cost of food.

The purchase price of raw milk in Latvia is now about €0.5 per liter. At the same time, experts note that the milk market turned out to be very limited, since the cost of raw materials increased by 50% during the year.

The Central Union of Latvian Farmers engaged in milk Production notes that the difficult financial situation has developed at other enterprises of the industry. In particular, the company "Limbazhsky cheese" (Limbažu siers) suspended work.

Experts find it difficult to predict exactly how the future fate of the enterprise will develop. Despite the crisis, only one company has been declared bankrupt so far. This allows many to hope for the industry's ability to survive in difficult conditions.

As the representative of the Association of Agricultural Cooperatives of Latvia Rolands Felmanis noted, the withdrawal of one enterprise from the market does not yet pose a threat to the entire industry. However, in cases where we are talking about individual farmers who supplied products for a bankrupt enterprise, such a situation can lead to their insolvency. In this case, it is easier for cooperatives that cooperate with several processing enterprises at the same time to survive the crisis.

Фото: Изображение от bublikhaus на Freepik