The CEO of dairy producer LB Bulgaricum, Nikolay Marinov, said that the supermarket chains apply a 80% mark-up on dairy products. "For months now, dairy prices have been rising - at a breakneck pace - and this largely explains why Bulgarians refuse to buy dairy products. I think it is high time to point a singer at the culprit for the price spike: the very high mark-ups of retail chains," Marinov said as quoted by his company's press office.
LB Bulgaricum is a major dairy producer in Bulgaria and the only remaining state-owned company in the sector.
According to the data from the commercial department of LB Bulgaricum, the price of milk and cheese in supermarkets would have been affordable without the requirements of retail chains. They first apply a 20-30% product supply charge and then a 50% mark-up, which adds 80% to the producer price, Marinov said. He argues that whether prices will go down soon depends on the policy of the big retail chains. "Small shops do not apply big mark-ups," he added. If this trend is to stop, the government must step in and employ all available mechanisms. But most importantly, retailers must follow strictly the principles of the real market economy and not use unfair practices, Marinov further points out.
Approached to comment the role of retail chains for the surging food prices, Food and Drink Bulgaria Association head Yana Ivanova said that Bulgaria has transposed the EU directive on unfair commercial practices and she would be surprised if any supermarket chain in Bulgaria uses unfair commercial practices.
Caretaker Prime Minister Galab Donev said that a daily monitoring and control mechanism would be introduced along the entire supply chain from the producer to the shop counters, whether they are shops of big retail chains or small neighbourhood shops. Donev said this after a meeting at the Council of Ministers where an analysis of food pricing was carried out with ministers and representatives of various institutions. "We found a gap between prices from the producer, through the trader, to the counter in the store. And the differences range from 20 to 30% and more," the Prime Minister said.
On February 7, the government announced setting in place a mechanism for daily monitoring and control of food prices along the supply chain from producer to retailer.
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