site.btaUPDATED Government Holds Emergency Meeting on Food Prices, Proposes Measures

The Government will do what is necessary to ensure the normal functioning of the market, Prime Minister Rosen Zhelyazkov said Saturday at an emergency meeting in the Council of Ministers, which was dedicated to the issue of food prices. The focus of the meeting was the protection of the rights of Bulgarian consumers and possible measures to calm the market.  

The meeting was prompted by a boycott of supermarkets and large food chains by consumers on February 13 over high food prices. On Friday, several organisations called for a new boycott to take place on February 20 across the country.

The meeting was attended by Finance Minister Temenuzhka Petkova, Agriculture and Food Minister Georgi Tahov, Economy and Industry Minister Petar Dilov, as well as the heads of the Consumer Protection Commission, the State Commission for Commodity Exchanges and Auctions, and the National Revenue Agency.

At a briefing after the meeting, Zhelyazkov announced that the Government has opted for a range of measures on prices and will propose them to the National Assembly. "One of the measures is legislative changes to curb resellers. An analysis will be made by the National Revenue Agency of the activities of retail chains - how many middlemen there are and who charges what mark-up. Other ideas being discussed are preventing deferred payments, unilateral incentives that lead to price increases. Unfair trading practices will be identified. Parliament should quickly change the composition of the Commission on Protection of Competition because the activities of this body are important for market regulation," he said.  

Food Minister Tahov told the briefing that his Ministy will elaborate a bill concerning the relations throughout the food supply chain - from producer to retailer, with the aim of bringing relief to consumers by protecting producers. "Following an appeal by the Prime Minister, the Ministry of Agriculture and Food has committed to draft a bill that aims to normalise precisely the relations along the entire supply chain from primary production, through processors, through the distribution of primary products, as well as wholesale and retail trade," Tahov said. "In our view, this regulation would lead to a normalisation of the market, and the main objective here would be for farmers to receive a fair and sufficient income for their produce, because at the moment there really is an imbalance, and through the bill we will try to provide them with additional protection, as well as to define unfair trade practices," Tahov said. He explained that the Ministry's intentions are to draft a bill that would introduce regulation of contracts throughout the chain, rather than artificially imposing prices or limiting markup levels. "It is through this bill that we want to give farmers that negotiating advantage so that they feel really protected and are in a more advantageous negotiating position," the Agriculture and Food Minister said.

Finance Minister Petkova said that large retail chains' turnover dropped by 28.8% on February 13 compared to a day earlier as a result of the boycott. According to data from the chains' fiscal devices, the turnover on February 12 was BGN 27.3 million, while on the boycott day it decreased to BGN 19.4 million. 

During the extraordinary meeting, Zhelyazkov said: "There is strong sensitivity in society on the subject of price rises. There is clearly a problem in supply chains and these practices need to be identified by the Antimonopoly Authority, the National Revenue Agency and Customs. Price dynamics is something that should be commented on in the context of inflation, but also in the context of consumers' perception of price growth of the main products in the consumer basket. As a гovernment we will not get carried away by populism and we will do what is necessary for the normal functioning of the market," Zhelyazkov said.

He added that all elements of the agri-food chain will be clarified, all elements from production to consumption which are price-forming and can lead to distortion of the final price for the consumer from which every Bulgarian suffers.

"The endless number of intermediaries affects both producers and consumers. We will analyse the problems and possible solutions in the system of executive power and proposals to the legislature," the Prime Minister noted.

"Prices are a function of the market. We will not take administrative measures to distort the market, but we will adopt measures to support fair pricing with clarity on what is happening along the whole chain. There are laws and institutions in this country and they must put into action," he stressed. "Law enforcement is our task and responsibility," Zhelyazkov added.

The Prime Minister was briefed on the current situation with food prices and the actions identified by the institutions. Further options to counter unfair commercial practices, to optimize supply chains and for regulatory changes were discussed.