The prices of basic food products continue to rise. The small consumer basket has risen in price by 8.6% on an annual basis, according to the latest CITUB data. At the same time, nearly a third of household income goes to food. The union also reports large differences between wholesale prices and those that consumers pay in stores. For some vegetables, the markup reaches between 130% and 150%.
„We are consistently seeing markups of over 60-70%. However, what goes above them – we are talking about cucumbers and tomatoes, which are 130-146%, – is 100% speculative“, said the president of the Bulgarian Trade Union Confederation Plamen Dimitrov to bTV.
The union monitors retail prices every month in about 600 retail outlets - large chains and small stores - in 80 municipalities. The data is compared with wholesale prices published by the State Commission on Commodity Exchanges and Markets.
According to Plamen Dimitrov, the markups of 60-70% for packaged products are also difficult to explain.
“If 60-70% has no explanation, I can't say whether there is speculation, but for me it is a very high markup, especially when we are talking about packaged goods - flour, rice, white beans. We have logistics, we have salaries, we have some other costs. But they cannot add 70% to the price“, he commented.
Even more serious according to the CITUB is the difference between tomatoes and cucumbers.
“Last year, these same two products had a 60-70% markup. Again inexplicable, in my opinion high, but 60-70%. Now we are at 130-150%“, said Dimitrov.
The CITUB also compares the prices of the same products in a retail chain in seven European countries.
“We see that in fact the prices of flour in Bulgaria are the highest. This flour, which has a 60-70% markup between wholesale and retail, ends up being more expensive in the store than German and French flour in the same chain“, pointed out the president of the CITUB.
In his words, such differences give the union reason to believe that there is a problem with the market mechanism.
“The same goods are repeated – on the one hand, inexplicable markups between wholesale and retail, and on the other hand – the highest price at least in these seven countries that we monitor. This gives us reason to say that there is something non-market. What exactly – should the CPC say“, added Dimitrov.
The Association of Industrial Capital in Bulgaria is more cautious with the definition of “speculation“.
“It is very difficult to give such qualifications. There is a body that can determine whether there is speculation, according to certain rules, and speculation is proven. In no case do I dispute the results presented by Mr. Dimitrov“, said Dobrin Ivanov from AIKB.
According to him, however, the data for some basic foods are worrying.
“The data shown for the prices of cucumbers and tomatoes are absolutely worrying - indeed, goods that are typical for Bulgaria and with established Bulgarian producers. What is striking is that perhaps somewhere along the supply chain and organization there is a breakdown in the market mechanism itself,“ said Ivanov.
He gave an example of Bulgarian producers who have difficulty finding a market for their produce, while the final prices in stores remain high.
“It is not possible for Bulgarian tomato producers to try to sell their produce, for it to lie in the field and be unable to sell it. I have personally assisted several such large producers to sell a nice pink Bulgarian tomato at a very low price, and at the same time to have such a large markup in stores“, Ivanov pointed out.
He also gave an example of grape producers in the Svilengrad region.
“If in Svilengrad these grapes cost zero, and in Sofia they cost 2 euros per kilogram, there is obviously something broken in this market mechanism that is not working in the best way“, said the AIKB representative.
According to him, the high markups can hardly be explained by the profits of agricultural producers.
“Obviously we cannot look for the high markups and large profits among producers“, Ivanov added.