The first store in the "Shop for the People" chain will open in the fall of this year, the government decided yesterday.
The chain will be managed by a company under the Ministry of Agriculture and Food.
The idea is to sell Bulgarian products and those with a minimal markup.
How will the concept be implemented and what will be the effect, commented on the show "This Morning" by Lachezar Bogdanov, chief economist at the Institute for Market Economics, and Miroslav Sevlievski, former Minister of Energy.
„When is it permissible for the state to intervene in a free market economy? When there is a so-called market failure, or when the market fails. When does the market fail? When there are natural monopolies, when there is a large information asymmetry, when there are large unfavorable external effects from certain actions“, announced Lachezar Bogdanov.
According to him, there are no such distortions on the food market in Bulgaria, because there are 27,000 enterprises or companies engaged in food trade and 42,000 retail outlets.
According to Miroslav Svilenski, however, the idea of the so-called “people's shops“ is good and they are becoming popular all over the world, even in New York, USA.
“This attempt by the government to do something for 10 million leva is not bad and should be supported. 10 million leva is nothing. All ministries have probably printed notebooks for 10 million leva, and no one will use them“, believes Svilenski.