THE PROBLEMS BETWEEN THE BULGARIAN MANUFACTURERS AND THE BIG SUPERMARKETS
Many of the small and medium-sized enterprises in Bulgaria are in poor condition at present. There are many reasons for the collapse of these companies. This is mainly due to the lack of adequate policies of the Bulgarian government with regard to the protection of the Bulgarian business and to the unadjusted relations between the Bulgarian manufacturers and the large retail traders. “This issue is topical in Bulgaria as well as in whole Europe. This is why the EC adopted a European action plan regarding the retail trade and published a Green Book which gave the start of the consultations about the unfair trade practices carried out by the large retail traders”, said in an interview for RB Plamen Grozdanov, chief executive of the “Made in Bulgaria” Union and added:
“Our members came up with several problems. One of the problems regards the admission fees which were fortunately abandoned by some of the supermarkets, but some of them still continue to charge such fees which are not tied down with any sales volumes”, Plamen Grozdanov went on to say. “The second problem regards the unreasonable cancellation of contracts which does not exist in any other EU member state. The huge differences between the trade discounts for the foreign suppliers and the Bulgarian companies are also very groundless. Sometimes the fees, the commissions and the taxes imposed over the Bulgarian manufacturers are several times higher than the ones imposed over foreign contractors. Currently Bulgaria imports fruits and vegetables from all parts of the world. 90% of the pork sold in Bulgaria is imported.
The import of vegetables and fruit also circulates around 90%. The import of milk and dairy products is nearly 55%. This places a huge burden over the local business. Recently we started to talk more about the control over the supplies coming form the EU countries. We should pay huge attention to this issue and sort it out quickly. There are many problems which need to be solved and this is why we started talks with the representatives of the big supermarkets. We want to sign an ethical code of behavior to the example of several European countries where all issues can be resolved through negotiations.”
The small and medium sized business has other ideas how to cope with the problems created by the big supermarkets.
“According to the “Made in Bulgaria” Union, we should act in two directions at the same time”, says Plamen Grozdanov. “Firstly we should aim at legislative changes. Secondly we should seek to find a mechanism of self-regulation which means that we have to look for ethical codes for the resolving of the problems between the Bulgarian manufacturers and the big supermarkets. The role of the regulatory body is also of great importance. The Commission for Protection of Competition has to fulfill its duties with regard to these relations”, says Plamen Grozdanov
According to Grozdanov, the European practice regarding the relations between the big retail stores and the local producers is different in the EU countries. Some member states count entirely on the self-regulation, some use legislative initiatives to resolve these issues. This is why the European Commission has initiated a process of consultations in order to make a careful and detailed analysis and provide a project for resolving these matters. Which are the sectors which could revive the local production in Bulgaria?
“We must pay a serious attention to the agriculture”, continues Plamen Grozdanov. “Now we have the opportunity to help the Bulgarian farmers through the EU funds as well and we have to pay special attention to the diversification of the agricultural production. The Bulgarian agriculture is famous with its monoculture. 3% of all farmers in Bulgaria receive nearly 80% of the subsidies per unit.
The Bulgarian Ministry of Regional Development and Public Works should not develop road construction only, but should also pay attention to the development of the Bulgarian regions. The authorities should think about the creation of market-places where the Bulgarian farmers and producers will have a shorter and quicker access to the market so they can avoid the long chain of intermediaries and suppliers. This could be done to the help of the public-private partnership between the Bulgarian business and the municipalities”, concluded Plamen Grozdanov.
