State Commission to Scrutinize Bulgaria's Hypermarkets
Bulgaria's Competition Protection Commission (CPC) will keep a watchful eye on the modern retail chains and will regulate their relations with the suppliers.
According to the draft amendments to the Competition Act, tabled in Parliament on Friday, the CPC will be deciding which retail chains have become “too powerful”, will be prescribing them new “general conditions” and will be drafting standard contracts for them to sign with their suppliers.
The amendments provide for hefty fines for the disobedient chains, which can reach up to 1% of the chain's daily turnover for each day, in which it violates the orders of the CPC.
All retail chains with an yearly turnover above BGN 50 M, defined as chains of “considerable market power”, will have to present their contracts with the suppliers to the CPC, which will inspect them and will cross out all clauses it deems “harmful”.
The draft amendments provide that the FMCG retail chains cannot impose on their suppliers taxes and services, which are not based on “scrupulous commercial practices”.
According to the MP Kornelia Ninova, who is one of the authors of the draft amendments, currently there is no real competition and the big retail chains impose “enslaving conditions” on their suppliers.
Representatives of the retail sector commented that the competition in Bulgaria's retail sector is one of the most fierce in Europe with the 10 largest chains holding about one third of the market, 10 smaller chains holding 15% and everything else is for the independent retailers and open air markets.
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Hm, first the Prime Minister comes up with a statement telling us that the foreign-owned retail chains are all criminals and tax fraudsters (without being able to give any proof for that), and now this one that gives the competition commission free hand at punishing exactly the same group of companies for alleged infringement of competition rules. That smells a bit like both actions are somehow related and it is not by coincidence that the state acts again against the same group of companies. Seems to me that the less successful Bulgarian competitors and suppliers which are not able to comply with the quality criteria of the big retail chains don't like it particularly to be part of a market economy and therefore they are using their political leverage to make the state puppets do what is in their interest (but for sure not in the interest of the Bulgarian consumer).