Bulgarian Government mulls new rules on retail chains

Written by on June 5, 2012 in Bulgaria, Business - No comments

Bulgaria’s Minister of Economy, Energy and Tourism, Delyan Dobrev, said on June 4 2012 that amendments to competition protection legislation on an alleged cartel among large grocery retail chains will be presented to the Cabinet within a month.

Dobrev said this at a meeting with representatives of the Made inBulgariaassociation of Bulgarian producers. Dobrev declined to disclose details of the proposal, but said that they would be in the best interest of producers, and at the same time would take account of the fact thatBulgariahas a market economy.

Lukan Lukanov, chairperson of the association, complained that large retail chains obstructed access to goods from medium and small Bulgarian producers to their stores by imposing on them innumerable fees and difficult requirements.

A recent report of an independent audit company, ordered by the Ministry of Economy, said that large retail chains had introduced a huge number of fees for the producers and the suppliers – including an entry fee, initial listing of a product fee, advertising fee, new store fee, barcode fee, shopping bag fee,  birthday fee and promotions fee.

Besides the fees, the chains allegedly pressured suppliers to give discounts of 40 to 71 per cent in order to gain access to their stores.

The various chains offer practically identical contracts to their suppliers. This has formed the basis of allegations of collusion.

Suppliers are also unhappy that chains pay for goods only after 90 days.

Bulgarian producers started complaining about the large retail chains several years ago, but there was hardly any official reaction. Recently, with the increasing market share of the retail chains (about 60 per cent as of the end of 2011), the complaints got louder.

Statistics show that as of the end of 2011, the import of foods toBulgariawas 3.45 billion leva, while 10 years ago it was 568 million leva. At the same time public opinion studies show that about 80 per cent of Bulgarians prefer to eat locally-produced food.

 

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About the Author

Hristina Dimitrova has more than a decade of journalistic experience and is a senior editor at The Sofia Globe; previously she has worked in both online and print media, having started her career at The Sofia Echo.