How much does the same imported chocolate cost in Bulgaria and the Netherlands? Alexander Bubia to FAKTI

How much are we “richer“ than the Netherlands? We wish we were, right? According to NSI data, the average income of a Bulgarian is 1,300 euros, and according to Dutch statistics, the average income there is 3,900 euros. Who doesn't want 3,900 euros… The civic initiative for prices “Antispecula”, the work of “Izprav se.BG“, compared 27 basic products in the same retail chain in Bulgaria and the Netherlands. And what did it turn out… Alexander Bubia, moderator of the “Antispecula” platform, spoke to FACTI.

- Mr. Bubia, you compared the prices of the same products in the same retail chain that operates in Bulgaria and the Netherlands. And what did it turn out...
- It turned out that as a student in the Netherlands, for a number of basic products, it is more profitable for me to shop in one of the richest countries in the EU than in the poorest member, Bulgaria.
I wrote down the prices of 27 products from the small consumer basket in a large retail chain and compared them with similar or identical ones in its Bulgarian branch based on the weekly price measurements that “Antispecula“ we have been doing since the beginning of June.
The result was that 16 of these items are significantly cheaper in the Netherlands, and another 3 are slightly more expensive than those in Bulgaria. The Bulgarian consumer pays more for eggs, rice, flour, sugar, butter, oil, fruits, vegetables, coffee. Of course, in the Netherlands, one of the countries with the highest standard of living in the world, a number of goods are far more expensive for the consumer's pocket – for example, meat and personal care products. You can find the numerical dimensions of this measurement on the website Antispekula.bg.

- So it turns out that Bulgarian consumers pay an average of 66.5% higher prices than Dutch ones, after taking into account the average income in both countries...
- In addition to a simple nominal comparison of prices in Bulgaria and the Low Countries, I decided to go deeper and add the weight of citizens' incomes. First of all – what percentage of the average wage in both countries is the value of each of these 27 products. For example, 1 loaf of bread of 800 g in Bulgaria, although 19 euro cents cheaper, amounts to 0.1% of the average wage (1300 euros), while in the Netherlands - 60 percent less or 0.4% of 3900 euros.
Accordingly, the data that we announced from “Antispecula“ show that on average this set of basic foods and essential goods weighs on the Bulgarian consumer by 66.5% more than on the Dutch one.

- So we are richer than the Dutch. Is that how it turns out...
- This is the paradox - the difference in the average wages of the two countries is threefold, and in the minimum wages - nearly 4.5 times. Additionally, the Dutch state, despite its private insurance system, supports its citizens and those of the EU through significant social benefits:
If you are a student and work 32 hours a month, you receive an additional 315 euros from the state; if you are pursuing higher education and come from a low-income family - another 400 euros; if you are under 29 years old, live in a rented house and your home meets certain criteria - you can benefit from several hundred euros of assistance; the situation is similar with health insurance - although it amounts to 150 euros per month, the state returns 130 of them.
The contrast with Bulgaria is unimaginable in scale. In winter, you sleep in the cold so as not to pay hundreds of leva to “Toplofikatsiya“, and in the end you receive a 1200 leva equalization bill - I spent the entire month of August helping citizens appeal against the illegal formula for building installations. Or you live in a waterless environment and in the meantime the parliament is about to adopt a new law on water supply and sanitation, according to which even if you don't have water, you will pay 3 water meter fees. And in the meantime I read how the government would bring back Bulgarians from abroad with a 400 leva voucher. Absurd.

- One of the explanations is that the two countries have different VAT rates on products. How is it in the Netherlands?
- Yes, the VAT on food in the Netherlands is 9%, but I don't think that such a measure would lead to lower prices in Bulgaria. In countries like the Netherlands, it works because there is real competition there and if a trader reduces his price by the difference from the reduced tax rate, he would win more customers at the expense of those who have increased their markup. Accordingly, all traders in such a competitive environment would have an incentive not to change their profit margin for products with reduced VAT, thus lowering prices for the end consumer.
However, history shows that this is not the case in Bulgaria. Let us recall that in 2022 the government decided to abolish VAT on bread, but there was no effect for consumers - the price remained the same, and traders increased their income for each loaf of bread sold by 20 percentage points. This was truly indicative of the way retail trade works in Bulgaria.

Instead of the market operating in conditions of true competition and, accordingly, the market price level being as low as possible, we observe how it is determined by 100 percent markups.

That is, this is a red light that should go on in the minds of consumers. By the way, a few weeks ago, one of the unions spoke about possible cartel agreements between large chains.
For us, the solution is to adopt the “Anti-speculation” Law, which was submitted to the National Assembly by 3 parliamentary groups in July. With it, we propose a price ceiling for basic food products and essential goods, marginal markups in large chains, a return to the prices of medicines and mobile services of January 1, 2025, a reduction in bank fees to their average levels according to the BNB for last year for a period until the end of 2026. Of course, these are not our whims, but measures based on the experience of European countries, all those that joined the eurozone, and especially Croatia, which was the last to adopt the single European currency. If the parliament shows the will to adopt it, the law would ensure the smoothest possible transition to the euro, by not allowing the economically powerful to inflate prices, taking advantage of people's fears.
Here my question is also to the BSP, who are among the sponsors of the “Anti-speculation“ Law.

Why, given that they are part of the parliamentary majority and have a Speaker of the National Assembly, has the bill not yet been considered?

However, I recall that they justified their participation in power by saying that they would be the social guarantor of this government. Is there a more pressing social issue than prices?

- Another explanation is that the products still have to be transported to Bulgaria, which is also an expense…
- My answer has two dimensions. First of all, Bulgaria is a producer of a large part of the 27 products in question. I do not believe that our production costs are higher than those in the Netherlands. A producer has to pay far lower wages; the difference in prices on the commodity exchange is minimal (the price of electricity on the free market for both countries in the last month has been around 80 euros per MWh); the price of gasoline is about 40% lower, and that of diesel - by 30%. Therefore, I do not see any other possible reason for this price level except for the trade markup.
Secondly, the price of some imported products is almost identical. I give an example - the same instant coffee in the same retail chain. Moreover, 2 weeks ago from “Antispecula“ We received a delivery invoice from a supplier for one of the large chains, referring to a 100-gram pack of chocolate, which shows that the wholesale price is 2.10 leva. Finally, when we enter the store of the merchant in question, the final price is 4.79 leva. That is why I deliberately compared the price of the same chocolate - in the Netherlands it costs 1.49 euros or 40% less than in Bulgaria, although for them this is also an imported product.

- Can we draw a parallel between how much life has become more expensive in the Netherlands and Bulgaria over the past year?
- Over the past year, we have observed how all kinds of institutions - from the National Statistical Institute to the State Commission on Commodity Exchanges and Markets, convince us that there is no inflation, that the consumer basket is getting cheaper, etc. Even for one of the previous months, the monthly inflation according to the National Statistical Institute data was negative. Of course, every consumer can see with their own eyes how this is not true. On the website Antispekula.bg, we are literally inundated daily with signals of price increases for various goods and services, many of which are accompanied by receipts from two different periods. This is further confirmed by the weekly price measurements with which we monitor price increases in 4 of the large retail chains.
I hope that the chains will soon stop violating Art. 55b of the Euro Adoption Act, which obliges them to publish their price lists for over 100 types of products from the large consumer basket every day. Of course, this would not happen if the Consumer Protection Commission were exercising its powers and sanctioning them.
As for the Netherlands - there at least the statistics are met with extremely high trust from citizens. According to data from their statistical institute, the average annual inflation for food and non-alcoholic beverages since the beginning of this year amounts to 4.15%.