Brivais vilnis: nearly all fish processing companies are experiencing losses
Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.
He says that considering the prohibition to carry products to Customs Union member states, Latvian fish processing industry has an enormous amount of unused and unloaded production capacity. There is also price-dumping to consider, because in the fight for markets, producers offer their goods below self-cost. «I doubt there is anyone working with profits. The question is how many of those producers will be able to continue working in the future. Losses, large or small, are present for everyone,» says the company’s chairman.
Babris says that Latvian and Estonian fish processing companies are unable to export products to Russia, Belarus, Kazakhstan or Kyrgyzstan. Situation in Ukraine still has not improved – residents’ purchasing power in this country remains low. «People [in Ukraine] keep leaving, there are no jobs and the political mess continues. I see no reason for any improvements there in the foreseeable future,» he says.
The chairman of Brivais vilnis also welcomed Finance Ministry’s readiness to support fish processors by postponing tax payments. The problem is that tax payments can be postponed by all members of the industry, which they do. It would be more reasonable from an economic, government and practical perspective to postpone tax payments only for companies worth saving.
Babris allowed that tax discounts should be tied to previous tax payment culture to support honest businessmen that pay taxes.
«It is not hard to create four columns of information about each company in the industry based on the following principles – paid taxes per employee, per production unit, per one euro turnover and goods or service price. Based on this information alone it will be possible to tell who the tax non-paying leader is in the industry, as well as ask the State Revenue Service a simple question – why is this company still afloat,» said Babris. He adds that because of overproduction, half the industry is not under load. At least 40% of the industry’s dishonest products can be stopped this way without reducing production volumes, but rather using taxes.