site.btaAgriculture Ministry Presents Agrifood Chain Bill

The Agriculture Ministry on Monday presented an agrifood chain bill, which aims to regulate trade practices and the fair distribution of added value. Agriculture Minister Georgi Tahov told a press conference at the ministry that all remarks will be taken into account. "Our goal and ambition is to regulate the fair relations between the farmer, the farmer as a supplier and the retail chains through the bill. The bill will apply to all retail chains that operate in Bulgaria. "We aim to ensure that everyone along the chain receives a fair price for their produce, and that the added value throughout the agri-food chain is distributed evenly," said Minister Tahov. In his words, this bill does not seek to antagonize the institutions and business representatives, but creates conditions for better functioning of the market.

The bill is a crisis measure, as it provides for the regulation of 22 products out of more than 5,000 that are sold by Bulgarian retail chains, the minister explained.

Dessislava Petrova of the Agriculture Ministry explained that the bill aims to ensure fair distribution of added value, balance and transparency in trade relations, as well as regulation of trade practices. It introduces mandatory written contracts, an electronic tracking system and a register of middlemen.

The bill provides for at least 50% of certain food products in large retail chains to be of Bulgarian origin. This includes milk and dairy products (excluding imitation products), fresh meat from large and small ruminants, pigs and poultry, eggs, honey and seasonal fruit and vegetables. In addition, maximum trade mark-ups and restrictions on promotions are introduced.

The bill also stipulates that that the markups on agricultural products and foodstuffs for processors may not exceed 20% of the final price of the product (excluding VAT).

The draft law also introduces restrictions on promotional discounts and marketing services: when selling agricultural products and food to the final consumer, discounts must not exceed 25%.

In addition, observatory under the Council of Ministers will be set up to analyze costs and the distribution of value along the chain and submit reports to the National Assembly.

A deadline for the application of markups, maximum levels of discounts, marketing, advertising and other promotional services, as well as specific requirements for the assortment of Bulgarian products, is one year from the entry into force of the law. If necessary, this period may be extended by an act of the Council of Ministers.

The bill stipulates that within one month of the entry into force of the law, the Council of Ministers should adopt a list of agricultural products and foodstuffs to which the regulated surcharges will apply. Within one year, the Agriculture Minister must put in place a public register of first middlemen and the Economy Minister an electronic traceability system for the agricultural and food supply chain.

Agriculture Minister Georgi Tahov predicted that if the bill is passed into law, retail prices in drop by at least 20%.