Bulgaria: Fines issued as inspections find unjustified hikes in food prices

The head of Bulgaria’s Consumer Protection Commission, Maria Filipova, told a news conference on June 25 that she had issued 43 sanctions to traders who had without justification increased prices of certain food products.

The news conference, involving the Consumer Protection Commission, Competition Protection Commission and National Revenue Agency, was held to present the first results of inspections intended to stave off retailers using the advent of the euro as a pretext to hike prices.

Filipova said that the fines had been issued on June 23 and traders had been given five days to provide evidence of objective reasons for the prices increases, and if they did not respond or provide evidence, the sanctions would come into effect, with a fine of 50 000 leva for each product with an unjustified price increase.

“Based on the analysis and data from the National Revenue Agency, it was established that certain types of essential food products have increased prices without a clear reason and objective economic factors,” Filipova said.

“Among the products are mineral water, eggs, cow’s yoghurt and cow’s fresh milk, cow’s cheese, sunflower oil, mixed mincemeat, flour, rice, potatoes, various types of meat products,” she said.

Filipova said that the increases were observed not only in large retail chains, but also in independent retail outlets.

The percentage increases differed, and were highest in Veliko Turnovo and lowest in the Plovdiv district, she said.

“These are the first speculative attempts, in places, to raise prices, which we will not allow,” Filipova said.

She declined to name the traders for whom she has issued sanction orders. The reason is that the law allows the names of the companies to be announced only after the orders come into force after an appeal.

Competition Protection Commission head Rossen Karadimov said that the commission has begun a sectoral analysis of the fast-moving food market, having already requested commercial information from 50 food chains.

Traders must provide the commission with detailed data on their suppliers, delivery prices and quantities, trade turnover, costs, losses, profits, and retail space.

“We want data including about competing establishments within a 20-minute walk so that we can check their prices as well,” Karadimov said.

The commission’s goal is to establish the extent to which there is a violation of competition law – unfair trade practices, abuse of a dominant position, prohibited agreements, and what are the reasons for the increase in food prices, by analyzing the contractual relationships of everyone in the chain: producer-supplier-distributor-retail establishment.

The sanctions for violations of the Competition Protection Act are much higher – up to 10 per cent of the trader’s annual turnover, Karadimov said.

The inspections are continuing, with further results to be announced later.

(Photo: Bartosz Wacawski/ freeimages.com)