Cartel for dairy products? CITUB insists on action from the CPC

A high rise in the prices of dairy products in retail, which unions describe as unexplainable and outrageous, is causing serious concerns about the existence of a cartel. According to the unionists, markups from the wholesale market to the end consumer reach from 50 to 100 percent, which raises questions about the market behavior of retail chains and suppliers.

Signal from the Unions

During an expanded meeting of the regional council of the Confederation of Independent Trade Unions in Bulgaria (CITUB) in Ruse, the organization's president, Plamen Dimitrov, made a very strong statement. He revealed that the union monitors the prices of goods from the so-called "small basket" on a monthly basis with great intensity, and the findings are more than concerning.

"What we are finding is outrageous to us. I would say that the regulatory bodies should have long ago, as the Commission for the Protection of Competition (CPC) has already started doing something, but has not finished it, namely to shed light on the cartel, in our opinion, in the pricing of some essential goods and services - especially dairy products. There is no other explanation for how the markup from the wholesale prices, which the State Commission on Commodity Exchanges and Markets announces weekly, to the prices in retail chains and small neighborhood stores can be between 50-70 to 100 percent. We are not talking about the price from the producer itself, but from the price at the wholesale market to the price in the store. In our opinion, there is non-market behavior by many of the "commercial players_," stated Dimitrov.

According to him, it's also unexplainable why prices in large retail chains are two to 12 percent higher than in neighborhood stores, which further worsens the situation for consumers.

Large-Scale Monitoring

CITUB has been conducting a large-scale study, covering over 600 retail outlets in 80 municipalities every month, for three consecutive months. This persistent trend, according to the unions, is a clear indicator of non-market behavior by both the large chains and their suppliers.

"If this isn't stopped, whatever we say about the euro being useful and good, it's all going to hell," Dimitrov stated emphatically.

The first report from the monitoring conducted in June has already been submitted to the National Revenue Agency (NRA) and the Commission for the Protection of Competition. The union expects to complete its first sectoral analysis of food products, focusing on dairy, by the end of the month. Should the suspicions of a cartel be confirmed, CITUB insists that the CPC finally make concrete decisions and impose adequate sanctions.

The Absolute Price in Bulgaria - The Highest in the EU

According to Dimitrov, the absolute price of dairy products in Bulgaria is the highest in the entire European Union. To support his claim, he explained that CITUB monitors the same retail chains in seven other European countries.

"The price of cow's cheese and fresh milk in Bulgaria in the last two years is one of the highest - it's higher than in Germany, the Netherlands, and France. For this reason, I claim that there is something wrong there," the CITUB president said.

He also touched upon the topic of vegetable imports and the potential price undercutting, clarifying that this should be evaluated by producers and regulatory bodies. The unionist noted that there is a serious irregularity in pricing, giving the recent July data as an example, which shows that the price of cucumbers has doubled from the wholesale market to the store.

Expectations for the Minimum Wage and Eurozone Accession

During the meeting in Ruse, Plamen Dimitrov also commented on the expectations for the minimum wage, which, according to him, will reach 620 euros (1213 leva) by the beginning of next year. The union is pushing for an annual wage increase of at least 10 to 15 percent.

Regarding Bulgaria's future membership in the Eurozone, Dimitrov expressed hope that the country will repeat the success of Latvia, Lithuania, and Estonia. He pointed out that if a similar growth is achieved within ten years, the average salary in the country, which is currently around 1250 euros, could reach 3200 - 3300 euros. The data he presented shows that after the adoption of the euro, wages grow faster, and inflation slows down.

"This is objective data. Whether it will be repeated in Bulgaria is hard to say,_q_ Dimitrov noted, emphasizing that the union's goal is to ensure sustainable income growth.