Progressive Bulgaria extends price controls by one year and doubles fines for “unjustified” price increases

The Commission on Protection of Competition and the Commission for Consumer Protection are to have more tools at their disposal to combat high prices of goods and services. Plans include creating a registry for the traceability of goods and introducing the concepts of “joint dominant position”, “excessively high price” and “fair price.”

This is provided for in two draft bills amending the Competition Protection Act (CPA) and the Consumer Protection Act (CPA), introduced by the ruling party “Progressive Bulgaria.”

At a briefing in the National Assembly, the sponsors Yavor Gechev, Konstantin Prodanov, and Todor Dzhikov announced that the measures are aimed at curbing speculative price increases. Due to the high public significance of the issue, the two bills will be considered at first reading by the Budget Committee as early as Tuesday morning.

The Factors Behind Inflation

According to the sponsors, inflation in the country is currently driven by three main groups of factors. First are external shocks – the war in the Middle East and high fuel prices on international markets. The second factor is general macroeconomic trends related to the transition to the single European currency. The third and most critical factor, according to “Progressive Bulgaria,” is speculation, which Konstantin Prodanov described as “fishing in troubled waters.”

Yavor Gechev emphasized that a large portion of the high prices in retail outlets and pharmacies cannot be economically justified.

We aim to fully expose practices that have so far remained in the gray sector,” he stated.

The party clarified that another package of measures is being prepared to support groups vulnerable to inflation, while these two bills are aimed at market mechanisms.

Amendments to the Competition Protection Act

The main focus of the amendments to the CPA is expanding the powers of the Antimonopoly Commission in proving unfair practices. The list of explicitly prohibited unfair commercial practices is increasing dramatically from 13 to 33 items.

We aim to fully expose these practices and prove excessively high prices,” Gechev stated during the briefing.

The bill introduces new definitions:

• “Joint dominant position”: This concept is borrowed from German legislation. It describes situations in which several economically independent market entities possess such market power that they can coordinate their behavior and “bend” market relations to their advantage, without the need for direct ownership links;
• “Excessively high price”: The new provisions empower the CPC to require traders to provide a detailed breakdown of prices and to demonstrate their pricing structure. A price is considered “excessively high” when it significantly exceeds economically justified costs and a reasonable profit margin, taking into account the prices of similar goods in European Union countries.

It provides for the creation of a mechanism whereby every product in wholesale trade will be documented throughout the entire supply chain – from the moment it crosses the border until it is released into the retail network. According to Gechev, this will allow regulatory authorities to stop “bad food” at the point of entry and prevent artificial price inflation along the supply chain.

Consumer Protection

The draft bill amending the Consumer Protection Act focuses on final pricing and protecting citizens from “fishing in murky waters.” Konstantin Prodanov emphasized that the effects of adopting the euro have not yet been fully realized and that measures are needed against potential obstacles to price adjustment.

We don’t want to twist the chains’ arms, but they shouldn’t do this to consumers and suppliers. No more feasting during a plague,” Prodanov stated categorically.

The changes provide for:

• “Fair price”: This is a new concept that will be calculated using an official methodology from the Ministry of Economy. It represents the indicative value that a given item should have under normal market economy conditions. The fair price will act as a “red flag” – in the event of significant deviations from it, the regulatory authorities (CPC) will initiate automatic inspections;
• Extension of the Euro Act: The term of the provisions requiring large retail chains to provide detailed information on retail prices is extended by one year (until August 2027);
• Requirement for justification: Retailers will be required to provide an economic justification for any significant increase in the prices of goods in the “basket of basic consumer goods”;
• Penalties imposed by the Consumer Protection Commission (CPC) are set to double. The aim is for them to have a real disciplinary effect and to act as a “straightjacket” for unscrupulous retailers.

Translated with DeepL.