Major Retail Chains Are Extorting Bulgarian Producers – Sociologist

Business | May 8, 2012, Tuesday // 14:32
Bulgaria: Major Retail Chains Are Extorting Bulgarian Producers – Sociologist Sociologist Kancho Stoychev has argued that Bulgarian producers are being extorted by retailers for discounts of 20-70%. Photo by Sofia Photo Agency

Major retail chains operating in Bulgaria are exerting pressure on local producers by making them pay around 40 different fees to have their items placed on the shelves, according to Kancho Stoychev of the Sofia branch of BBSS Gallup International.

Speaking Tuesday during a round table devoted to the perspectives for the Bulgarian economy, he said that the major retailers, most of them international companies, were demanding a discount of 20-70% on producer prices.

"You can figure it out for yourselves - there is no way that this will not lead to chain bankruptcies among Bulgarian companies, job cuts, reduced consumption and an economic crisis," he argued.

"The word crisis has turned into a clich? but the better definition of the state in which the Bulgarian economy, and the Bulgarian entrepreneur in particular, find themselves in, is depression. This is the case because Bulgarian entrepreneurs prefer to keep their money in a bank rather than invest in good projects," Stoychev observed.

He listed corruption and abuse of monopoly power as the main reasons for the weak investment activity.

Stoychev claimed that he had seen and had been told about personal correspondence between the major German and French retail chains operating in Bulgaria and the heads of government in Germany and France.

He suggested that the Bulgarian government had been subjected to serious pressure and had been prevented from adopting administrative and legal changes allowing an increased presence of Bulgarian products on retail shelves.

Stoychev further voiced fears that the ongoing crisis would give birth to a global government in the next few years and suggested that the process was inevitable.

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Tags: retail chain, retailer, Polling agency, Gallup International, bulgarian producer, discount

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