Bulgaria’s Commission for Protection of Competition (CPC) has released a wide-ranging sectoral review of the country’s food market, identifying deep structural weaknesses across the supply chain, with the most severe distortions concentrated in milk and dairy production.
The study, which spans every stage from agricultural production to retail sales, is intended to serve as a foundation for public discussion before any regulatory or administrative measures are proposed.
CPC Chairman Rosen Karadimov stressed that the analysis is not aimed at singling out specific companies, but at creating an informed basis for dialogue and long-term reform. According to the commission, competition dynamics at the retail level cannot be understood in isolation.
The team behind the report emphasised that vertically linked markets — including production, processing, wholesale distribution and cross-border trade — directly influence price formation, bargaining power and market behaviour on store shelves.
Zhelyo Boychev, who headed the analytical project, said the most visible distortions appear in the dairy sector, where Bulgaria has experienced consistent declines in output over recent years.
Between 2020 and 2024, raw cow’s milk production fell by 25 per cent, fresh milk output dropped by 8 per cent, cheese production declined by 9 per cent, and yellow cheese production decreased by 14 per cent. Egg production also fell sharply, down 17 per cent over the same period.
These trends have been accompanied by a significant rise in imports. According to the CPC, milk and dairy imports increased by 43 per cent, further tightening margins for domestic producers and processors who are already operating under mounting cost pressures.
The commission noted that the dairy sector is highly concentrated, prompting a closer look at mergers and acquisitions approved in recent years. It also flagged the absence of national quality standards, limited institutional oversight, labour shortages and rising production costs as factors that compound structural weaknesses in the supply chain.
Beyond production, the review examines the geographic footprint and pricing behaviour of major retail chains operating in Bulgaria. Compared with many European Union member states, Bulgaria ranks among the countries with the fewest regulatory barriers for opening and operating retail outlets.
In contrast, countries such as Austria and Germany impose stricter rules related to store locations, operating hours and additional regulatory requirements. While Bulgaria’s liberal framework has encouraged retail expansion, it has also contributed to uneven competitive conditions across regions.
For the first time, the CPC published a regional “competitive map” of the retail sector. It shows that Sofia, Plovdiv and other large urban centres host a wide range of competing chains, while several regions operate with only three to five major retailers, significantly increasing local market concentration.
Despite these disparities, the commission found that food prices remain largely uniform nationwide. This is notable given stark income differences between regions. Annual income per person stands at around €55,000 in Sofia, compared with just over €7,100 in Vidin, yet consumers face similar price levels across the country.
As part of the review, the CPC examined pricing practices at ten major retail chains during June, July and August this year. The analysis found no evidence of coordinated or speculative price increases linked to Bulgaria’s euro adoption process.
However, the regulator identified unusually high trade markups, often resulting from a combination of deep supplier discounts and additional retail margins applied on top of delivery prices. In milk products, markups ranged from 2 to 59 per cent of regular delivery prices, reaching up to 77 per cent after discounts were factored in.
Cheese products showed margins between 21 and 66 per cent, rising to 82 per cent after discounts, while yellow cheese markups ranged from 10 to 62 per cent and climbed as high as 91 per cent. Eggs, sold in packs of ten size L, carried margins from 20 to 89 per cent, with no supplier discounts recorded.
The steepest margins were identified in mineral water, where markups on 1.5-litre bottles ranged from 13 to 72 per cent, and surged to as much as 135 per cent after discounts.
According to the CPC, such pricing practices can distort competition, particularly when significant delivery-price reductions are followed by high retail margins. These conditions place sustained pressure on producers, weaken their negotiating power and reduce profitability across the processing sector.
The interim report recommends measures including greater cooperation among producers, shorter supply chains, the introduction of national quality standards, stronger oversight, targeted financial support for processors and increased transparency in retailer practices.
The next phase of the investigation will focus on retail structures in economically weaker regions, pricing and discount mechanisms between suppliers and traders, and the milk and dairy sector in particular.
Karadimov said the commission hopes the findings will encourage voluntary reforms and self-regulation, but warned that formal proceedings will follow if unfair practices or abuses of dominance are identified.
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