Bulgaria’s Competition Protection Commission (CPC) will keep a watchful eye on the modern retail chains and will regulate their relations with the suppliers.
According to the draft amendments to the Competition Act, tabled in Parliament on Friday, the CPC will be deciding which retail chains have become “too powerful”, will be prescribing them new “general conditions” and will be drafting standard contracts for them to sign with their suppliers.
The amendments provide for hefty fines for the disobedient chains, which can reach up to 1% of the chain’s daily turnover for each day, in which it violates the orders of the CPC.
All retail chains with an yearly turnover above BGN 50 M, defined as chains of “considerable market power”, will have to present their contracts with the suppliers to the CPC, which will inspect them and will cross out all clauses it deems “harmful”.
The draft amendments provide that the FMCG retail chains cannot impose on their suppliers taxes and services, which are not based on “scrupulous commercial practices”.
According to the MP Kornelia Ninova, who is one of the authors of the draft amendments, currently there is no real competition and the big retail chains impose “enslaving conditions” on their suppliers.
Representatives of the retail sector commented that the competition in Bulgaria’s retail sector is one of the most fierce in Europe with the 10 largest chains holding about one third of the market, 10 smaller chains holding 15% and everything else is for the independent retailers and open air markets.