“One of the measures we are working on is that retail traders will not be allowed to reduce the price of their products by more than 35% of their value, in order to avoid unjustified pricing,” says the Minister of Economy and Industry.
Q: Minister Dilov, why did an urgent meeting of the Council of Ministers have to be held on a Saturday, a non-work day, to regulate food prices?
A: The government is taking concrete measures regarding food prices, with the aim of ensuring fair conditions throughout the entire chain—from producers to the end consumer. The measures we propose will balance public relations and aim for fair pricing, without distorting the market. We are planning concrete legislative initiatives that will be submitted to the Council of Ministers and subsequently to Parliament.
We aim for transparency throughout the entire chain from producer to consumer, with the primary goal of shortening the supply chain. We also intend to propose specific measures to support small and medium retailers, enabling us to regulate the agri-food chain in Bulgaria. We will protect producers by ensuring they receive better payment for their products, while also promoting more sustainable and healthy eating habits. The legislation we propose will balance the relationships among producers, processors, and retail chains to establish more stable and fair market conditions.
Q: It appears that you are working on a draft law that will reduce the number of intermediaries between agricultural producers and the end consumer?
A: Yes, we are actively working on such a draft law. European experience shows that such initiatives can protect farmers’ incomes and regulate contracts throughout the supply chain, which is extremely important for creating fair conditions for all participants.
Our main goal is to ensure fairness and transparency in food trade while protecting the interests of both producers and consumers. A well-regulated supply chain can provide better security and stability by reducing unnecessary markups that increase final consumer prices.
It is important to note that in some cases the current supply chains do not align with the reality of the Bulgarian market. Therefore, we are actively seeking solutions that reflect the specific needs of our economy, and we will continue to work on creating regulations that ensure balance and efficiency throughout the entire process: from producers to consumers.
Q: What specific measures will be proposed in this draft law?
Among the measures we are implementing is the restriction of discounts. Retailers will not be allowed to reduce product prices by more than 35% to prevent unfair pricing and market distortion. Additionally, no more than 25% of a product’s volume can be sold through promotions, ensuring that discounts do not compromise the long-term stability of trade. We are also considering allowing producers to resell their selling rights in retail outlets, as retail chains often charge high entry fees. We aim to cap these fees or create a mechanism for selling these rights if desired. We also plan to limit the practice of returning and replacing unsold products to reduce unnecessary costs.
For deferred payments from retailers to producers, we plan to shorten the current 30-day period. If earlier payment is requested, the additional fee of 0.5% per week will not apply. We are exploring the possibility of lowering this rate for special payments and/or shortening the payment period.
The draft law also proposes limiting “push marketing,” preventing retail chains from enforcing mandatory advertising. Marketing expenses will be capped at a certain percentage of turnover to avoid excessive costs.
The Ministry of Economy and Industry is committed to these proposals, which aim to ensure fairness and transparency in trade while protecting the interests of small and medium retailers. These steps are part of our broader strategy to create a stable and competitive market that benefits both producers and consumers.
Q: When can we expect these bills to be introduced to the Council of Ministers?
A: A working group has already been formed, including representatives from the Ministry of Economy and Industry, the Ministry of Agriculture, the Ministry of Finance, as well as the State Commission on Commodity Exchanges and Wholesale Markets, the Commission for Consumer Protection, the National Revenue Agency, and other bodies. We hope that it will finalize the draft law as soon as possible.
Q: How have other European countries regulated these issues? Will you draw on their experience?
The European experience demonstrates that such initiatives can protect farmers’ incomes and regulate contracts across the supply chain, which is essential for ensuring fair conditions for all involved. Notably, Bulgaria is among the few European countries lacking this type of legislative initiative. Other European nations have implemented similar measures to safeguard producers, reduce unfair trade practices, and ensure transparency in the food supply chain.
We have collected detailed information about practices in other countries through our commercial attachés. Our main focus has been on the experiences of European countries, from which we can gain valuable insights. For example, in these countries, retailers are not allowed to offer discounts greater than 34% and cannot sell more than 25% of a product’s volume through promotional offers. Additionally, there are minimum purchase prices that retailers must adhere to, protecting producers from having to sell their products below production costs. Unfair trade practices, such as late payments or unilateral contract changes, are prohibited, ensuring clear sales conditions and pricing.
Q: Do you support the idea of price caps?
The state’s artificial intervention and any efforts to limit price increases by setting maximum markups on essential food items could result in cartel agreements or increased pressure from retailers on producers to reduce their prices. Currently, there is no legal foundation or authority for state bodies to impose maximum markups on products or implement any other pricing measures. Furthermore, there is no executive body with the necessary powers or the human and financial resources to oversee such control over markups.
Setting a universal maximum markup would also be problematic given the various characteristics and features of different products, such as shelf life and storage requirements.
Furthermore, attempts to introduce maximum markups in other EU member states show that such measures have not achieved positive effects and have only created additional market distortions.
Q: Will the Consumer Protection Commission step up its oversight?
The state must enhance its oversight to safeguard consumers from illegal practices and promote transparent market conditions. Effective monitoring will ensure that price information is clear and accurate, enabling consumers to make informed choices. It will also closely track whether promotions are announced and implemented correctly and whether unfair trade practices are being used.
Q: Based on the latest data from the National Statistical Institute, food prices in January rose by 2.5% compared to the previous month, while overall inflation stands at 2%. Do you think this will impact Bulgaria’s ability to meet the eurozone entry criteria?
Bulgaria’s entry into the eurozone would be the natural culmination of a significant and lengthy journey—our integration into the European Union, the Single Supervisory Mechanism, and the Exchange Rate Mechanism (ERM II). If this occurs, it would be highly advantageous for us, as seen in the experiences of current eurozone members. Joining would bring greater economic stability and better macroeconomic management, boosting investor confidence and increasing foreign direct investment. It would also lower currency risk. By adopting the euro, currency exchange would no longer be necessary, and transaction costs with eurozone countries would decrease. Additionally, eurozone companies currently enjoy low interest rates and easy access to financing, which helps enhance competitiveness and attract more investments.
Q: What are your priorities as Minister of Economy?
The primary goal for my team and me is to rebuild trust in Bulgaria as a dependable economic partner and an attractive place for investment and business. To accomplish this, we need economic and financial stability, increased competitiveness, and a stable business environment that supports small and medium-sized enterprises.
One of our key focuses will be continuing to develop our industrial zones and making them an attractive place for new businesses. The Government Program of the Republic of Bulgaria places special emphasis on concrete measures for reducing bureaucratic and regulatory burdens, which is one of the main obstacles new investors face. In this regard, our commercial attachés around the world will be available to all companies to help them find partners. They will also assist Bulgarian small and medium enterprises looking to expand abroad, thus strengthening Bulgarian exports.
Bulgaria’s entry into the Organization for Economic Cooperation and Development (OECD) is a key external economic priority for us. Of the 25 reviews the organization needs to conduct for Bulgaria, official opinions on 11 have either been adopted or are in progress. Two of these reviews, overseen by the Ministry of Economy and Industry, are conducted by the Consumer Policy Committee and the Steel Committee.
Q: You are the least well-known minister in the cabinet. Tell us a bit more about yourself.
I believe the Minister of Economy’s role is not to be a public figure but to foster development and stability. My motivation for taking on this responsibility is to improve Bulgaria’s economic situation and simplify life for Bulgarian entrepreneurs and citizens. I am a practical person who prioritizes real solutions and actions. I prefer not to talk much about myself—my focus has always been on completing specific tasks and achieving positive results.