Vegetables and Bread Lead the Price Hikes in Bulgaria’s Food Market

In recent years, food prices in Bulgaria have become a key issue in both public and political discussions, especially following the abolition of preferential VAT rates and the country’s pursuit of meeting inflation criteria for adopting the euro. While some retail chains have faced boycotts in response to rising food costs, proposals to regulate price hikes through specific limits have resurfaced. This report looks at long-term food price trends and compares them with household income changes, as detailed in an analysis by the Institute for Market Economics.

Over the past decade, the overall consumer price index has increased by 42% as of January 2025, while food prices have risen nearly twice as much, by 79%. Within the food sector, vegetables and bread have seen the steepest price hikes—98% and 94%, respectively. Other food categories such as fruit and fish have experienced smaller increases, with prices rising by 48% and 42%, respectively. The most significant price surges, however, have occurred in recent years, primarily due to rising raw material and energy costs, as well as increased labor expenses.

Between 2021 and January 2025, food prices escalated by 50%, with vegetables seeing a 56% rise. Although oils and fats had a more modest 22% price increase during this period, they saw substantial price hikes in 2022. In particular, bread prices have been the subject of varied policies. Initially, VAT discounts and limits on trade surcharges helped to stabilize bread prices after a sharp 100% increase by mid-2022. However, with the end of preferential tax rates in 2024, bread prices saw another significant rise, jumping by over 30 points between December 2024 and January 2025.

When analyzed in greater detail, bread is now the most expensive commodity in the last nine years, with the price index for bread reaching 223 compared to 2015. Butter, fresh vegetables (excluding potatoes), and potatoes have similarly experienced substantial price increases. On the other hand, baby food has become one of the least expensive food categories over the same period, with a price index of 136, alongside relatively low price increases for fish and dried fruits.

From an income perspective, the dynamics of wages and household income have outpaced food price increases. Between 2015 and 2023, the average household income per person increased by 119%, and estimates for 2024 suggest an even higher rise, close to 135%. Similarly, wages for workers have seen stronger growth, meaning that, even if a household consumed only bread (the food with the highest price increase), income growth would still outpace food price inflation. While food prices have undeniably risen, the faster growth of income means there is no major loss of purchasing power in general.

However, certain food categories, like dairy products and fats, still raise concerns due to systemic price issues. While political proposals for measures such as "surcharge ceilings" on food prices have been made, these types of regulations have had limited success in practice. As such, many view these proposals as more of a populist tool for politicians to demonstrate concern for household budgets rather than effective solutions.