The price level in Latvia’s catering industry has reached its highest point to date, Janis Jenzis, head of the Latvian Restaurant Association, told LETA.

He noted that 2025 is expected to be a year of record turnover for the Latvian catering industry, which may initially appear to be a positive indicator of the sector’s growth but is “overshadowed” by record-high cost increases.

Jenzis added that inflation continues to rise, driving price increases in the sector. As a result, the price level in Latvia’s catering industry has reached an all-time high, a trend that must be closely monitored to ensure Latvia does not lose competitiveness in the region and across Europe.

He pointed out that several European countries have introduced reduced value added tax (VAT) rates for the catering sector, which lowers final prices. At the same time, he said, other countries in the region have been less affected by Russia’s aggression in Ukraine, which continues to negatively impact tourism figures in Latvia.

Jenzis explained that despite higher turnover, the number of customers is declining due to a shortage of tourists, while the purchasing power of the local population, quality of life and opportunities to dine out are decreasing. As a result, entrepreneurs are forced to raise prices in order to sustain their businesses.

In the long term, he warned, this could have a negative impact on tourism figures, highlighting the need for government involvement in tax regulation, sector support and investment in tourism marketing. Jenzis noted that tourism is a leading service export sector and that any planned cuts to marketing funding in 2026 would have a negative effect on tourism recovery.

He stressed that Latvia currently invests significantly less in tourism marketing than its neighbors, is lagging behind in tourism performance, and risks losing ground to Estonia and Lithuania.

The Latvian Restaurant Association therefore believes that the tax burden on the catering sector should be reviewed, a reduced VAT rate for catering services should be introduced, and the tourism marketing budget for 2026 should be increased.

The Latvian Restaurant Association was founded at the end of 2017 to represent Latvian restaurants and strengthen their competitiveness.

Source: BNS

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