The government will not back down to Kaufland after the retailer hit back at a fine from a regulator, economy minister Alexander Pulev said. "We as a government will not bend," he said.
Pulev called the tone of Kaufland chief executive Mihail Petrov arrogant and aggressive. He said Petrov shows disrespect for the government, institutions and independent regulators.
Pulev was replying to a warning from Petrov that there would be consequences if the chain has problems in its business. "Stop, because Kaufland is very big, and if it starts to go down, the collapse of Corporate Commercial Bank will look like a spring breeze to you," Petrov said.
Pulev said the chain had two options after the penalty. It could admit weaknesses in its management and conditions that allow unfair practices, and promise to improve things for consumers and producers. Or it could respond in an arrogant and aggressive way. It chose the second, he said.
The minister said the warnings do not worry him. The Sofia market is profitable and liquid, he said, and if one chain loses ground, its rivals will fill the gap within a few weeks. He called this normal free competition.
Pulev advised Petrov to pay the state and to look at the figures on foreign investment. The latest data for this year show that direct foreign investment in Bulgaria has grown by 100% over the same period, which means it has doubled.
The cabinet is not fighting the chains but unfair practices, Pulev said. The measures and changes to the law aim to curb violations, market distortions, unclear pricing and unfair practices, and the institutions must act, he said. The executive has already started to act, and changes to the law are due in parliament.