IN DEFENSE OF BULGARIAN CONSUMERS AND PRODUCERS – THE PROBLEM OF SURPLUS CHARGES AND DISCOUNTS

Abstract

In a market economy the term "market price" should reflect the market opportunities of users (amount of income) and not to violate the economic interests of the producers. Structure of the economy is such that the predominant not only in Bulgaria but also in the other European countries is the sector of trade and services, where the main income for the traders are the margins or surplus charges. The article contains an analysis of the surplus charges of three main commodity groups - white flour, oil and sugar based on official data from the Ministry of Agriculture and Food. The analysis covers margins of the three major sales markets of food - commodity markets, large retail chains and other stores for retail sale. The results suggest that in addition to the normal surplus charges for wholesale and retail, there are the so called by the author "parasitic surplus charges" that are not controlled nor penalized in any way. In this respect, the author proposes the adoption by the Council of Ministers Regulation on the surplus charges with which to resolve this problem.

Moreover, the author notes, and there are plenty of discounts that major retailers impose on Bulgarian producers and suppliers. Since these traders do not fall under the legal concept of "dominant market position", they are not sanctioned by the Commission for Protection of Competition. In this regard, the author suggests introducingin  the Law on Protection of Competition concept of "economic dependence" or the preparation of sectoral trade law with which to regulate not only this issue but also trade margins.