Bulgaria to Cap Retail Chains Markup - Expert

Edward Stoychev, Chairman of the State Commission on Commodity Exchanges and Wholesale Markets, has vowed to curb unfair practices of retail chains. Photo by BGNES

Edward Stoychev, Chairman of the State Commission on Commodity Exchanges and Wholesale Markets, has vowed that Bulgaria will soon have legal provisions regulating the markup imposed by chains of stores.

In a Tuesday interview for the "Bulgaria On Air" TV station, he explained that Bulgaria would not set a precedent but would deploy an already established European practice.

"The major retail chains keep gaining market power. At present they control over 50% of the retail market and this allows them to pressure Bulgarian producers into selling at lower prices," Stoychev commented.

He said that the watchdog often encountered ambiguous terms in contracts between traders and producers.

As an example Stoychev cited hidden bonuses and general terms that eventually made producers agree to a discount of up to 48% for retail chains.

As "hidden discounts" he cited the so-called retail chain entry fees and turnover bonuses.

Stoychev claimed that the steep increase in egg prices from two weeks ago was speculative in nature but added that the situation on European markets was similar due to the entry into force of the EU Directive on the protection of laying hens.

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