Bulgaria's Competition Regulator Opens Case Against Another Retail Chain

Bulgaria's Commission for Protection of Competition (CPC) has opened proceedings against another major retail chain and is examining eight suspected cartel agreements, while also investigating unfair trading practices and misleading claims about the Bulgarian origin of goods, CPC representative Zhelyu Boychev said on BNT.

The regulator is also scrutinizing the growing use of retailers' private-label brands and continues to monitor the fuel market, Boychev said.

Commenting on the sanctions imposed on one of the country's major retail chains and the public reaction that followed, he stressed that the Commission's decisions were based on its statutory responsibilities rather than media or social media commentary.

“The Commission for Protection of Competition is not influenced by reactions appearing in the media or on social networks. We focus on performing our duties exactly as mandated by the legislature,” Boychev said.

He explained that the CPC had launched its investigation on its own initiative because of serious problems in the way large retail chains deal with Bulgarian producers and suppliers. Although manufacturers have repeatedly voiced dissatisfaction with retailers' conduct, relatively few formal complaints have been submitted to the Commission.

Boychev also argued that the size of the penalties imposed was not exceptional by European standards. He referred to the Polish competition regulator, which has issued substantially larger fines that were subsequently upheld by courts, as well as enforcement measures taken by the French competition authority.

The CPC representative recalled that the same retail chain had previously been penalized. In late 2016, the Commission imposed a fine of approximately BGN 330,000, which was upheld by the Supreme Administrative Court in 2021. Two further penalties of BGN 250,000 each were imposed on the company in 2025.

Court proceedings concerning the two 2025 sanctions are still underway, with financial and economic expert assessments being prepared. Boychev said the Commission had evidence and arguments to support the violations it had identified, but the final decision would be made by the court.

He pointed to the annual renegotiation of prices as one of the main sources of tension between retailers and suppliers. According to Boychev, large chains send all their suppliers requests for price reductions each year, prompting lengthy negotiations over the size of the cuts.

“Every year, the company sends a proposal for 'improvement', or, to put it plainly, a price reduction, to all its suppliers. This happens every single year. A long negotiation process then ensues: by what percentage will they lower their prices for the current year? Once an agreement is reached, it is applied retroactively, dating back to the beginning of the year,” Boychev explained.

He said the process could also work against manufacturers seeking higher prices to reflect increased production costs, as retailers sometimes delay or complicate negotiations. In discussions with industry representatives, the CPC found cases in which suppliers had kept their prices unchanged for years despite rising expenses, even as the final prices charged to consumers had varied.

“This is the major problem we identified in our analysis of these relationships: the value added is not distributed fairly. Consequently, the value added shifts from the manufacturer to the retailer,” Boychev said.

Asked whether the Commission was examining similar practices at other major chains, he confirmed that it had launched proceedings against another company. He declined to identify the retailer, saying its name would be made public at a later stage.

The CPC is also examining the expansion of private-label products offered by retail chains, which it believes could threaten the position of Bulgarian manufacturers if the practice is not regulated.

“This is a major issue in Europe as well; it is currently being actively addressed through European legislation and regulations, and it remains a focus of our Commission’s work. If we undermine or destroy our own domestic production, that will be the inevitable outcome. Private-label brands, as you mentioned, pose such a risk if they remain unregulated,” Boychev said.

Another area under investigation involves foreign-made products being marketed as Bulgarian. The Commission is paying particular attention to fruit and vegetables, along with other categories in which consumers could be misled about the origin of goods.

Beyond the retail sector, the CPC is pursuing eight cases involving suspected cartel agreements. Its work in the fuel market has also uncovered abuse of a dominant position, Boychev said.

“Regarding fuels, we have a proven case of abuse of a dominant position. The Commission has imposed its largest fine in this sector - over 262 million levs. Abuse of a dominant position has been established in both the fuel storage market and the wholesale market. There are two separate infringements,” he stated.

Boychev added that the antitrust regulator continues to keep the fuel market under constant surveillance.