Riga, November 26, 2025 — Latvia’s competition authority has concluded a sector inquiry into the scrap metal market, warning that high entry barriers and growing concentration — with TOLMETS controlling more than half of industry revenue — risk undermining long-term rivalry.
The inquiry found that although many firms still operate in the purchase of ferrous and non-ferrous scrap, the number of market participants has nearly halved over the past decade. TOLMETS group companies now own almost half of all active scrap yards nationwide and accounted for 57.8% of sector turnover in 2023.
Market structure concerns
The authority said TOLMETS’ scale advantages, extensive vertical integration, and control over the full chain — from collection to sale — make it difficult for smaller competitors to operate under equal conditions.
Officials also flagged significant barriers to entry. New firms face complex permitting requirements, high financial guarantees, costly equipment purchases, and long investment repayment periods. Establishing new yards can be hindered by regulatory uncertainty and public resistance.
The authority noted that the dominance of a single vertically integrated operator can deter newcomers, making it harder for smaller players to compete effectively and potentially weakening market dynamics over time.
Regulatory recommendations
Following the inquiry, the authority urged the Ministry of Climate and Energy to revise the financial guarantee system for scrap handlers. It recommended linking guarantee amounts to the number of yards an operator owns, arguing that the current framework places a disproportionately heavier burden on smaller firms.
The authority also reiterated its call for the Ministry of Smart Administration and Regional Development to review financial guarantee rules at least every three to five years to ensure they reflect current market conditions.
