The markup on dairy products from the wholesale price to the final price in stores in Bulgaria reaches up to 90%. This is shown by an inspection by the Commission for the Protection of Competition (CPC), carried out in 50 retail chains and small traders, covering over 500 sites. For comparison - in most European countries the markup varies between 25 and 35 percent. An analysis of the market in the studio of “Hello, Bulgaria” was made by economist Julian Voinov and Dimitar Zorov from the Association of Dairy Processors in Bulgaria. They revealed why the situation remains opaque for consumers and how retail chains dictate the market.
“The topic is not new. We, the producers, have been talking about these markups for over 7 years, but until now it has been swept under the carpet“, said Zorov. He expressed satisfaction that the CPC has finally publicly confirmed what has long been known in the industry – that the final prices in stores are highly distorted due to the actions of retail chains and intermediaries.
According to him, producers cannot publicly announce the prices at which they sell their products to retail chains due to clauses in the contracts that define this information as “trade secret“. This is precisely what makes it impossible for the average consumer to compare the delivery and sales price.
“The difference between the price at which we sell yellow cheese to the chains and the price at which it is offered at the counter reaches 90%“, said Zorov. “Cheese has up to 60% markup, milk – up to 80%. These are real numbers established by the CPC. The problem is that consumers do not see them“, he added.
The manufacturer also revealed that despite the increase in prices in stores, it has not changed those of its products to retail chains since October 1, 2022. According to him, additional discounts are even required every year.
Economist Julian Voinov confirmed Zorov's words with statistical data: “The prices of dairy products in Bulgaria are on average 25% higher than European ones, and the purchasing power of Bulgarians is about 60% of that of the average European“. According to him, this speaks of distortion of competition and a lack of effective regulatory control.
“The same foods, in the same retail chains, but of different origin – Bulgarian or Western European – are treated differently. "Products of large foreign concerns enter into contracts with a lower mark-up, while Bulgarian ones are subject to up to 90%," the economist explained. Zorov openly stated that manufacturers have no real opportunity to set conditions for the chains - neither for a marginal mark-up nor for transparency in pricing. "If someone tries to clarify prices, the entire power of the retail chains falls on them - they take your products off the shelves, even though you paid a listing fee," he shared.
According to Voinov, the food price monitoring website created by the government is "non-functional" - it does not offer a real opportunity to compare products, brands or long-term trends. This deprives consumers of a tool for real control.
Zorov was more critical: “The state is delaying the law on limiting markups, even though it has passed two public discussions. Why? Who is afraid of transparency? Who do these people work for - the consumer or the interests of the chains?“.