Retail Chains State Regulations: An Exercise in Futility

Opinions |Author: Hristina Dimitrova | April 16, 2014, Wednesday // 11:59|  views


Bulgaria's Parliament passed at first reading the amendments to the Competition Protection Act. They regulate the business relations between the  retail chains and the Bulgarian producers and impose various requirements on the chains.

The MPs from the ruling Bulgarian Socialist Party (BSP) who tabled the amendments claim they would introduce consistent policies for protection of national producers, markets and consumers. 

Today the BSP MP Borislav Gutsanov even said that 20% of all the goods in those chains must be Bulgarian.

It sounds very nice, but is actually an attempt of the state to meddle in the free market and regulate business relations between private enterprises. The FMCG retail chains, who would be most affected by the  amendments, hold around 35% of the Bulgarian market and could hardly be called enterprises with “considerable market power”. In spite the claims that almost all goods in those chains are foreign-made, actually at least 50% of them are sourced from local producers. 

On the other hand, few Bulgarian producers can provide the consistent quantities and quality required by the chains, so any attempts  for forceful  regulations are an exercise in futility and would hardly change anything.

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Tags: retail chains, FMCG, regulations, free market, considerable market power, producers


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