The Consumer Protection Commission (KZP), the Bulgarian Food Safety Agency (BABH) and the National Revenue Agency (NAP) have been checking the central warehouses of all retail chains together since 9am. The checks will run until Friday, KZP chair Maya Manolova said. From next week they will also cover the later links in the supply chain, not just warehouses.
Manolova announced mass checks on the chains in a TV interview on 24 September. She said Bulgarians pay more than the average EU resident for some goods, even though their incomes are lower. KZP began checking actual selling prices and trading practices on 2 October.
Earlier on this topic: Manolova: KZP starts mass checks over high food and fuel prices
The commission is checking food group by group. Dairy products, fruit and vegetables come first, because people complain about them most. New data showing very high markups on dairy products led to the joint checks in warehouses.
KZP's first results show the gap between the supply price and the selling price for some food groups in the chains is more than 120-140%. The markup shows how much more a product sells for in the shop than its warehouse price. It is highest for butter, at 135%. For fresh milk it is 99%, and for cheese the highest figure reaches 95%.
KZP has already opened proceedings in 11 cases of unjustified price rises on basic foods. Traders who give no objective reasons for higher prices face a fine of 10,000 to 100,000 euros for each product.
KZP is looking for unjustified price rises and unfair trading practices, while BABH and NAP check for breaches within their own legal powers. The aim is to show how food gets from the producer and importer to the buyer, and why the chains prefer imports from other EU countries or from outside the EU over Bulgarian producers.
The joint briefing took place at a warehouse base of one of the chains. The agriculture minister and the heads of BABH and NAP attended. Manolova also mentioned minister Abrovski. She said their presence shows the state is using its full power to check the supply chain and keep prices fair. All Bulgarians are worried about prices and have a right to know why they are so high here, she said.
Manolova also replied to the Association for Modern Trade (SMT), which issued a statement after her previous briefing on the new data from the checks. She called the traders' arguments about markups and profits "laughable arguments". She said they have no explanation for why Bulgarian buyers are treated in a more humiliating way than buyers in other EU countries. The commission has found more worrying data on markups for basic foods, she added.
She said the personal attacks against her are "a sign of a weak position".
"The commission is not a markup authority, and its chair was not appointed as the moral pillar of society," SMT said in its written statement. The association acknowledges that KZP has a responsible role in keeping a balance between consumers and business. It says checks on whether prices are economically justified have run regularly for more than a year.
The traders say markup and gross margin are different things, and neither is pure profit. SMT says the gross margin on retail food in Bulgaria is similar to that in France, while profits are close to the EU average, at the level of Germany. It says KZP confuses people with inaccurate information and most often mixes up price indexes with markups or profits.
The association wants the commission to say how many products it has checked, for how many of them the markup is 150%, and which are the lowest markups on basic goods. SMT also asks why KZP publishes only the single highest figure and not the markups on other goods, and whether it tells people that a markup is not profit. According to NAP statistics cited by the association, a fine is imposed in 1 of every 10 cases.