Vladislav Mihaylov (NAM) to FAKTI: The biggest risk is that Bulgarian foods will disappear from the market

Budget, money, electricity, taxes, NAP… The budget for 2026 is still being discussed, which the government refers to as the “only possible“, but many organizations have a different view… What to expect… Vladislav Mihaylov, chairman of the National Association of Dairy Processors (NAM), spoke to FAKTI.

- Mr. Mihaylov, the budget for 2026 is still being discussed, but many organizations of livestock breeders, farmers and processors insist that you should not be excluded from electricity compensation! Why, what risks do you see?
- The biggest risk that affects the most people is that Bulgarian foods will disappear from the market - either because they have become too expensive, or because they are no longer produced. I will explain why. If we do not receive compensation, our electricity costs will become much higher, and this automatically means more expensive production. Livestock farmers, for example, cannot bear more burdens and costs. They either raise prices or close.

And by the domino effect, all the rest of us in the food production chain are suffering.

And together with the problematic points in the budget, the increase in social security contributions and especially the blow they want to inflict on us with the mandatory state-approved software, the so-called SUPTO, we are entering a death spiral for the sector.

- Is SUPTO the biggest problem for you in the budget?
- SUPTO is an absolutely unnecessary financial and organizational burden –

The cost of implementation alone can reach 50,000 leva!

Unbearable for a huge part of the enterprises in livestock and food processing. Not to mention that more people have to be hired to service this system. It is difficult enough, and especially for small and medium-sized enterprises, which most of us are, it becomes unbearable.

I heard the theory that SUPTO would help to brighten up the sector. This is complete nonsense.

The exact opposite will happen – We, who work transparently, with invoices, pay our taxes and actually support the rural economy, will be exhausted. And those who work in the “gray sector“, pay their workers in cash, sell without reporting anything to the state – again in cash, will continue in the same way. I would not be surprised if part of the “white“ business decides to go “gray” – the state is clearly supporting it, not us.

- Why are many of the enterprises in the listed sectors excluded in the promulgated decree of the Council of Ministers, related to compensation for temporary relief of electricity prices?
- I assume that it is an omission that the Ministry of Energy and then the Council of Ministers will correct. Who would want to ruin three sectors that produce Bulgarian food? We submitted a statement during the public discussion of this decree with very clear arguments on what the exclusion of our sectors from compensation will lead to - both for the producers themselves and for the people who want Bulgarian products at a normal price. We immediately provided the additional information they requested. We have the support of the Minister of Agriculture, Mr. Tahov. We expect a new, responsible decision soon.

- High energy and international competition - where do we stand within the EU market?
- Our largest markets are in countries outside the European Union. Over 60% of our production is exported to countries such as the USA, Australia, the United Arab Emirates, Saudi Arabia. Of course, they will look for suppliers there who give them the best price. If we raise our energy costs in production, we must also raise prices in exports - and we automatically become uncompetitive. This is a vicious circle from which there is no escape.

- Many of the enterprises excluded from compensation have already been recognized by the EC as being at risk of exporting production outside the EU due to high energy costs and international competition. What does this mean for us?
- Namely, the European Commission understands very well how high energy costs can limit both our production and exports.

Let me add that the rural economy, which is already in a critical state, will also suffer here - some producers will move their activities outside Bulgaria and outside the EU in general.

And they are one of the few investors in rural regions who also create jobs. Are we going to let these investors escape so easily?

- Higher electricity costs mean more expensive production, which will also lead to higher food prices for Bulgarian consumers. Is this a threat or a future fact?
- As I said before, either prices in stores are raised, or production facilities are closed. I'm not sure that Bulgarian consumers are ready to accept even higher prices. And they will stop buying. And in the end, they will close production facilities again.

- Your colleagues say that the "livestock" sector is even threatened with extinction with an over 30% increase in electricity prices. This is because...
- Livestock farmers in most cases work "at zero", without profit. And even with less than the minimum number of people - they cannot, for example, afford staff cuts. Someone has to work for the farm to exist, right? And they are highly dependent on the continuous supply of electricity. Heating, lighting, ventilation, technology and everything else that requires raising animals while adhering to the highest sanitary standards.

- As producers, you say that according to the EC guidelines, state aid must be objective, transparent and non-discriminatory. Is that the case in our country?
- In this case, the food industry, livestock and agriculture sectors are discriminated against. And we insist that the scope of compensation be expanded.

- Support for all energy-intensive sectors is also important for social stability. Where are we, do we have social stability? Prices are rising, inflation in Bulgaria too. Where are we going like this…
- In order for there to be no inflation, there must be fair competition and state support for businesses that work in the open, create jobs, pay our taxes. Many lies were told and written about the introduction of the euro, and this scared many people and led to an artificial increase in prices. I call for more reason - both on the part of the state with the measures it is introducing, and on our own part - to be united and to focus our efforts where there will be real benefit for business, for consumers and for our economy in general.