August 8 — this is the date when the amendments to the Law on the Introduction of the Euro are set to come into force. The changes were voted and finally adopted at second reading in Parliament last week, but were only published today in the State Gazette — at the very last moment — creating yet another source of uncertainty for businesses. This is another signal that the state is arming itself with legal tools for direct intervention in a highly competitive market, said Stanislav Popdonchev, Deputy Chairman of the Bulgarian Industrial Association (BIA), in a comment for Forbes Bulgaria. Attempts of this kind have been numerous in recent months, including the proposed Supply Chain Act and the creation of a state-owned retail chain.
KEY CONTEXT
The amendments to the Law on the Introduction of the Euro were submitted by the Council of Ministers and passed both first and second readings in Parliament within just two weeks. The initial draft raised significant concern among businesses, as it envisaged a ban on price increases for 17 months, along with extraordinarily broad powers for the regulatory authorities.
In the end, the consensus text that was adopted — and has now been published in the State Gazette — limits the ban on price increases to 12 months, until August 8, 2026, which is also the duration of the dual price display period. Traders will be allowed to increase prices if justified by “objective economic factors,” a definition that was expanded between the first and second readings. In case of an inspection by the regulatory authorities, companies will be required to provide information proving the presence of such factors.
EXPERT OPINION
“In this sense, there is no longer a formal legal ban on traders changing the prices of goods and services offered to end consumers,” Popdonchev told Forbes Bulgaria. The latest amendments also introduced a two-month grace period — until October 8 — during which regulatory authorities will issue only written warnings rather than impose fines. This is a relief for businesses, giving them extra time to prepare proper product labels, update restaurant menus, and adjust retail software and fiscal devices for euro transactions.
However, Popdonchev warned that the addition of “other factors” that have a direct and significant impact on cost price could pose problems. “The nature and scope of these ‘other’ factors remain unclear, as does the assessment of their significance, which will be determined by the control authorities. Cost price itself is not a clearly defined concept. The definition of ‘essential goods and services’ also creates uncertainty, as it lists certain food and other items as examples, but is not exhaustive. A better approach would be to establish a concrete list of goods and services. There are plenty of such examples in the legislation — one is the list of goods with high fiscal risk,” he added.
Equally concerning is the fact that the Council of Ministers will still have the power to determine anti-speculation and anti-price hike measures without Parliament’s approval. “This creates legal uncertainty for businesses and opens the door to non-market behaviour — not from traders, but from the state itself,” Popdonchev stressed.
In combination with the government’s draft Law on the Supply Chain of Agricultural Products and Food, published for public consultation at the end of July, and the bill submitted to Parliament on “Measures for Price Control of Essential Goods,” the latest changes to the Law on the Introduction of the Euro raise serious concerns in the business community that the state is “arming itself” with legal tools for direct intervention in a highly competitive market — one that undoubtedly includes the production, processing, and trade of food and consumer goods.
ADDITIONAL CONCERNS
“With the extraordinary powers given to the Council of Ministers — to determine whether there are sudden price increases without a clear definition of the term, and to decide unilaterally what measures to take — all this without Parliament’s sanction — in my view, this is trampling on parliamentarism. I cannot understand how MPs themselves voted to allow the CMS to do whatever it wants without their approval. This is a recipe for extremely crude interference in market relations,” said Nikolay Valkanov, Executive Director of the Association for Modern Trade, in an interview with Bulgarian National Radio.
The Law on the Introduction of the Euro also contains provisions that are difficult to apply in practice — for example, the requirement for traders to publish, on a daily basis, information on the individual retail prices of goods in the “large consumer basket” as defined by the Consumer Protection Commission. “The solution would work if the information were published once a week and only for a limited number of product groups — no more than 10–15. In its current form, the law requires traders to post hundreds of thousands of price records daily, which is unlikely to achieve the intended goal of greater transparency and price comparability for consumers. Moreover, revealing the sales patterns of competing traders, which will inevitably happen with daily price disclosures, carries the risk of the opposite effect — deteriorating competition and encouraging non-market practices,” Popdonchev said.
WHAT WE STILL DON’T KNOW
There also appears to be no consensus between institutions on the definition of “objective economic factors.” For example, the Association of Non-Food Retailers (ANFR) points out discrepancies over whether wage increases can be considered a valid reason for price increases. According to the business community, the wage hikes in the public sector, included in the state budget passed in March, are in fact one of the main drivers of inflation.
“We call for clarity and predictability in the process of introducing the euro. Clear guidelines and guarantees are needed to ensure that businesses are not put at a disadvantage due to administrative ambiguities,” said ANFR representative attorney Galin Popov.
NOT THE FIRST ATTEMPT BY THE STATE
For months, the authorities have made unprecedented attempts to intervene in market principles, claiming to fight speculation and protect consumers. One example was the hasty adoption — during the vote on the state budget — of a plan to create a chain of state-owned stores to combat high food prices. The company “Store for the People” was officially established yesterday by a decision of the Council of Ministers, with a capital of 10 million BGN. The first state store is expected to open in Plovdiv next month.
Another major concern is the draft Law on the Agri-Food Supply Chain, which remains under public consultation. In short, it introduces a cap on markups along the supply chain, regulates the purchase of primary agricultural products from producers as the first wholesale sale, and imposes requirements on first buyers. It also requires contracts for purchasing such products to have a minimum term of six months.
The proposal emerged earlier this year, prompting sharp reactions from industry organisations, who warned of risks of price increases, food shortages, and serious market distortions. The business community insists that the bill essentially embeds a crisis regime of direct profit redistribution — an unacceptable approach for a free-market economy.
Public comments on the bill can be submitted until August 12, but according to Valkanov from the AMT, none of the business community’s criticisms have been taken into account. “In its current form, it is even more restrictive and even more limiting for business,” he told BNR.
