Bulgaria’s Retail Crisis: 800,000 Family Businesses Gone, Prices Soaring

Business | February 11, 2025, Tuesday // 09:18
Bulgaria: Bulgaria’s Retail Crisis: 800,000 Family Businesses Gone, Prices Soaring

Over the past two decades, more than 800,000 family-owned stores have vanished from Bulgaria, according to former Agriculture Minister Kiril Vatev. Vatev, speaking on Nova TV, emphasized that any manufacturer not partnering with large retail chains risks going bankrupt. He also suggested that regulations should be put in place to manage the agri-food supply chain more effectively.

Vatev explained that boycotting large retail chains would not resolve the ongoing pricing issues, as these stores do not follow the same rules as those in the countries they originate from. He proposed that, for instance, they should be restricted from operating on weekends and should close earlier in the evening, allowing smaller stores the opportunity to survive. In some European cities, supermarkets are located outside residential areas, he noted.

Further supporting the need for greater regulation, Vladimir Ivanov, Chairman of the State Commission on Commodity Exchanges and Markets, stressed that tighter control and adherence to market rules are necessary to ensure fair competition. He highlighted the structural problems in Bulgaria’s trade distribution, where goods pass through multiple levels of resellers before reaching consumers, preventing significant changes in pricing. Ivanov called for the creation of an Association of Agricultural Producers and trade structures to address these issues and improve market conditions.

Meanwhile, Dimitar Zorov, Chairman of the Milk Processors Association, refuted claims that producers were making the highest profits. He explained that the markup between manufacturers and the final price of products, such as dairy, ranges from 55% to 90%. For example, if a product's price starts at 10 leva, the final price can rise to 16-18 leva. Zorov pointed out that the main profit is made by the sellers, not the manufacturers. Factors such as new European regulations for recycled packaging materials have contributed to a 15% price increase for bottled products in the past month, making the cost of goods rise by 25-30% in total over the last year.

In this environment, four civil organizations in Bulgaria, including the Consumers' Federation and "The System Is Killing Us," have called for a nationwide supermarket boycott on February 13 to protest rising food prices, particularly affecting pensioners and low-income workers. The campaign, supported by former ombudsman Maya Manolova, aims to highlight price disparities between Bulgaria and countries like Germany and Austria. The boycott has gained traction, with over two million social media interactions, and is backed by proposals in Parliament to cap surcharges on essential goods. Critics accuse retailers of monopolistic practices and excessive markups, while economists warn that such short-term protests might only have a temporary effect, urging for long-term market regulation.

Source: Nova TV

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Tags: stores, Bulgaria, prices

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