Law Amendments Could Raise Food Prices – Retail Chain Manager

Business | June 10, 2014, Tuesday // 16:03
Bulgaria: Law Amendments Could Raise Food Prices – Retail Chain Manager File photo.

If amendments to the Competition Protection Act as they are, prices in the FMCG retail chains will go up by 10%, Dimitar Spasov, CEO of Kaufland Bulgaria, told the 24 Chasa daily. 

According to him, the amendments, if they come into effect as they are proposed, will impose limitations on the big chains and they won't be able to give the so-called “logistics bonus” to the smaller producers. Currently the chains charge them if they deliver their goods to the central warehouse, rather than driving the production to the various stores themselves.

The amendments will also disallow the fee for participation in the discount leafelets, which usually drives up the sales of the discounted products.

According to Spasov, only those two examples would lead to a 10% price hike. In his words, similar regulations, however much milder, existed in France, the Czech Republic and Hungary. They were cancelled when it became apparent that they're causing food price hikes. 

In the end of last week Vice PM Daniela Bobeva said in Parliament that  some of the definitions will be “softened” at the second reading of the amendments to the  Competition Protection Act in its part on the retail chains. 

According to her, the term “considerable market power” will be replaced by “strong negotiating position” and the number of unfair trade practices will be limited to six. 
Those changes, according to Bobeva, have already been discussed with the retail sector and the producers.

The second reading of the amendments to the Competition Protection Act is due to take place this week.

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Tags: Kaufland Bulgaria, food, prices, hike, amendments, Competition Protection Act, considerable market power
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