Bulgarian government in talks with retailers to sell bread at no profit
The authorities are negotiating with major retailers in Bulgaria to sell bread without including profits for themselves, Agriculture Minister Roumen Porozhanov said in a September 19 television interview, following days of media reports about rising bread prices.
Bulgarian bread manufacturers say that the main reasons for the increased bread prices are higher wheat prices and rising minimum wages.
Porozhanov told Nova Televizia that the idea was that the consumer price should just cover the costs in the chain itself. “For now, I am getting such assurances, because the chains themselves are the regulators of the prices,” he said.
He said that both white and yellow cheese reached the consumer with a mark-up of about 30 per cent. This was also a subject of discussion with traders, Porozhanov said.
On September 18, Bulgarian National Television aired three reports about the bread price, with one saying that the price had risen by between 20 and 30 stotinki in several cities.
The report said that the reasons were the expected increase in the price of natural gas in October and the weaker wheat harvest.
The Commission for the Protection of Competition is to discuss the possibility of an investigation into the sector because of the demand for higher prices and the extent to which they meet the economic conditions, the report said.
Bulgaria’s Grain Producers Association said that there would be an increase in the bread price although Bulgaria has enough grain.
The wheat harvest in Bulgaria in 2018 was 15 per cent lower than expected. About 1.8 million tons of wheat are consumed annually in Bulgaria and the yield was more than five million. However, because of the lower harvest, grain producers have already raised prices by 25 per cent.
The report said that for example, in Plovdiv, the price of white bread had risen from 88 stotinki to 1.10 leva in just a few days.
There is sensitivity in Bulgaria about issues such as the bread price, given that consumers could be mobilised to protests over the cost of living. Some Bulgarian media have stepped up their coverage of these issues, including about the decision pending on the natural gas price in October, although so far the regulator has been involved only in discussions on recommendations, with no actual decision.
The Bulgarian government has responded to cost of living concerns, which are likely to be used as a catalyst for anti-government protests, with moves such as announcing a pledge to increase public sector wages as well as state pensions in 2019.