Comment by Emilia Milcheva:
"Aren't you boycotting?", I ask the man, who looks to be over 70, carrying a bouquet of purple tulips (7 for 4.49 leva), and he opens the bag with the logo of a retail chain and shows two bottles of oil - for 2.59 leva each. On a day like today, there are many promotions. His son is waiting for him at the entrance to the store - he had shopped the day before because he supports the boycott of retail chains and because: "It can't be like this anymore, with these prices - their products will spoil, they are such greedy cattle!". I ask him: "And when you finish what you bought, where will you shop - here or at a neighborhood grocery store?". The man waves his hand angrily, without answering. His father mutters something like "whether we protest or not, it's the same".
Pressed by the rise in the price of basic food products, Bulgarian citizens are angry, and political forces are skillfully directing their discontent at "Western" retail chains. The national statistics, which are expected to announce inflation for January, are under strong pressure and accusations of data distortion by the extreme patriots from "Vazrazhdane". But Eurostat has already "hinted" that it will probably not be as tame as the December one. The Harmonized Index of Consumer Prices (HICP) for December 2024 shows that the average value of food prices in the EU was 145.2 points, while for Bulgaria it was a worrying 174.4 points, for Romania - 166.2, and for Croatia - 148.7, the agencies reported.
"For God's sake, brothers, don't buy!"-2
The boycott of retail chains (not Bulgarian ones) announced by four organizations did not have a particularly strong effect. Although some stores reported a certain decrease in buyers - there is no data on turnover, it seems that the steam has gone down the drain. In conditions of inflation and economic problems, when social inequalities are exacerbated, large "Western" chains are convenient lightning rods for discontent. They are perceived as part of the "elites" who do not experience the difficulties of ordinary citizens. The protesters are convinced that the chains use their monopoly position on the market to manipulate prices and blackmail producers with their conditions.
The organizers of the boycott are the Federation of Consumers in Bulgaria, the Association "For Affordable and Quality Food", "United Pensioners' Unions" and "The System is Killing Us", and the campaign coordinator is Velizar Enchev, leader of the "Bulgarian Spring" party, which left the unification with the BSP because of its coalition with GERB. But the BSP, which is a left-wing party, also supports the action. The war with the retail chains is a trademark of "Positano" 20 - it was started back in 2018 by the former leader, Cornelia Ninova. At that time, the Minister of Agriculture in the third GERB cabinet was persuading large retail chains to sell bread without a markup.
Similar to that ridiculous populist move, two bills with similar goals have already been submitted to parliament - for the state to intervene in pricing and in the private business of large chains. The BSP proposes a 10% ceiling on markup on 70 basic foods and for the government to be able to limit profits from essential food products. The DPS-New Beginning and its leader - the oligarch Delyan Peevski, who was sanctioned for corruption, want the state to "announce price levels" and also limit profits.
The government regularly reports palliative measures against the rise in the price of products. In 2023, the Ministry of Economy and Industry, headed by Bogdan Bogdanov, announced an initiative "Accessible for You", publishing information about the cheapest foods on the MII website. "The idea is for large and smaller grocery chains to voluntarily reduce the prices of 2-3 products from 9 food groups", Bogdanov, now a PP-DB MP, announced at the time.
Populist cover for dysfunctional regulators
This wave of populism is not an antidote to inflation, but it is more convenient to make a fuss about such projects than to reform regulators such as the Commission for the Protection of Competition (CPC), whose composition is about to be renewed, and the Commission for the Protection of Consumers (CPC), as well as the legislation. The idea of a price ceiling covers dysfunctional regulators, said MP Martin Dimitrov (PP-DB). Economist Nikola Yankov pointed out on BNR that the CPC is a debtor to Bulgarian citizens. "Traders and food producers know very well how things are and will explain to you that such a thing as a ceiling on markups and prices will lead to the opposite effect - to the withdrawal of investments from the market, to limiting competition and to deficits and increasing prices". This is exactly what happened in Serbia and Hungary when imposing temporary price ceilings on some foods and fuels in 2022.
However, social networks are full of prices of sausages, butter and other products of the same chain in Bulgaria and European countries, where some of these foods are cheaper. (Why are foods more expensive than those in developed Western countries, people are also angry in Croatia.) Against these arguments, the different VAT rates are pointed out (20% for Bulgaria), as well as the fact that the examples are for a much larger market, where with small markups a higher profit is realized, they also offer quality of service and new models of doing business. There are also explanations for the higher prices of oil due to the increase in the price of the raw material. And they are opposed by other counterarguments - about pressure exerted by the chains on Bulgarian suppliers, about discounts, delayed payments, bans on selling cheaper elsewhere, bad state policy for agricultural producers.
The boycott, method of use
In the media noise, the silence of the Bulgarian institutions is clearly visible - if you don't count two announcements of inspections. The CPC will check whether there is evidence of cartel agreements, although it recently announced that it had not found any at large food retailers - after a 2-year inspection.
The CPC will check whether food prices have been speculatively increased. Its chairwoman Maria Filipova is so active that she even calls on citizens to send her complaints about telecoms. This hyperactivity was related to speculation that Filipova is a possible nomination for ombudsman. By the way, former Ombudsman Maya Manolova, who also voiced the boycott and whose formation "Stand Up BG" is part of the BSP-United Left, will run again for public defender. The Ombudsman is among the positions that offer a chance for an acting prime minister.
The Association for Modern Trade (AMT) doubted the spontaneity of the boycott, because it comes at a time when Bulgaria is very close to meeting the price stability criterion for the eurozone. Pointing out that modern trade contributes to over 8% of GDP and is "an honest, transparent and responsible business", AMT believes that they are trying to involve them in political battles.
But they have nothing to worry about. The data shows that a one-time decrease in turnover of over 50% was registered on the very day of the boycott in Croatia, North Macedonia and Montenegro, but an increase was noted in the days before and after it. And in Romania, no such decrease was even recorded.
So, while politicians play populism, citizens will fight for stacks of oil on promotion.