Declaration by BESCO and 18 Organizations for the Urgent Withdrawal of the Draft Price Control Act

TO The National Assembly of the Republic of Bulgaria

Copy to The Council of Ministers of the Republic of Bulgaria

DEAR LADIES AND GENTLEMEN,

In connection with the draft Law on measures for price control of basic goods and services adopted at first reading, we declare the following principled, clear and categorical position:

The organisations representing a significant part of the real economy of the Republic of Bulgaria — trade, manufacturing, the financial sector, fuels, pharmaceuticals and services — categorically and unconditionally reject the introduction of any new, additional or extraordinary measures for administrative control over prices and mark-ups, beyond the already existing legal framework, including the Law on the Introduction of the Euro in the Republic of Bulgaria.

We consider that the proposed draft law constitutes a crude, systemic and disproportionate interference in free pricing and market mechanisms, which is not economically justified, is not legally necessary and creates real and significant risks for the functioning of the market at an extremely sensitive and critical moment for the Bulgarian economy — the introduction of the euro.

The Eurozone cannot and must not serve as a justification for extraordinary measures that de facto dismantle competition, undermine the principles of the free market and come into direct conflict with the foundational rules of the single European market. Such legislative initiatives discredit the Republic of Bulgaria before its European partners precisely at the moment when the country is seeking trust, stability and long-term investment as a full member of the Eurozone.

The proposed repressive regulations on prices and mark-ups represent an extraordinary administrative burden, a serious operational and legal risk for companies, and a direct factor of destabilisation of supply chains, both at national and regional level.

Such an approach does not exist as an established or acceptable practice in countries that have already transitioned to the euro, and is in open contradiction with the principles of predictability, legal certainty and institutional consistency that should accompany this process.

Despite the stated objectives, the proposed law creates a real and entirely foreseeable risk of:

• withdrawal of products from the market and expansion of the grey sector;
• restriction of supply and the emergence of shortages;
• contraction of Bulgarian production and an increase in unemployment;
• blocking and postponement of investment decisions;
• weakening of consumers' purchasing power and contraction of domestic consumption.

All of this will have a direct and extremely negative impact on the economic environment, investment climate and financial stability of the state.

In the Republic of Bulgaria, effective and functioning mechanisms already exist for:

• consumer protection;
• sanctioning of unfair commercial practices;
• prevention of cartel agreements and abuse of market position;
• control over misleading pricing and unfair competition;
• restrictions and control regarding price increases during the period of dual display of prices pursuant to the Law on the Introduction of the Euro in the Republic of Bulgaria.

The Commission for Consumer Protection, the Commission for Protection of Competition, the National Revenue Agency and the other competent bodies possess the full set of powers that, where necessary, can and should be applied strictly within the framework of the existing legislation, including the Law on the Introduction of the Euro in the Republic of Bulgaria.

The introduction of a new, parallel control regime duplicates existing functions, creates legal uncertainty and opens a broad field for contradictory interpretations, selective application and administrative arbitrariness.

The introduction of the euro itself represents an extraordinarily burdensome technical, regulatory and organisational process, requiring large-scale adaptation of IT systems, accounting, logistics and mass staff training. Only days after the start of this process, instead of a stable and predictable environment, business is faced with new, hasty and populist in nature legislative initiatives that act as an administrative shock and undermine confidence in the institutional framework. Bulgarian business has proven that it can and will be a reliable partner in the process of introducing the euro. However, this requires trust, stability and legal certainty, not additional regulatory pressure and experiments with the market environment.

In conclusion, we insist that the National Assembly reject this and all similar attempts to substitute the existing legal order and to undermine the trust between the state and business. Otherwise, we clearly state that such actions will have direct, measurable and long-term consequences for the investment environment, competitiveness and economic stability of the Republic of Bulgaria.

YOURS SINCERELY,

Bulgarian Industrial Association

BESCO — Bulgarian Entrepreneurial Association

Alliance of the Technology Industry

Association of Banks in Bulgaria

Association of Industrial Pig Farming

Association of Meat Processors in Bulgaria

Association of Producers of Non-Alcoholic Beverages in Bulgaria

Association of Fish Products Producers BG FISH

Association of Pig Farmers in Bulgaria

Bulgarian Association of Wholesale and Retail Traders of Medicines

Bulgarian Petroleum and Gas Association

National Industry Union of Bakers and Confectioners

National Vine and Wine Chamber

Association "Foods and Beverages Bulgaria"

Association for Modern Trade

Association of Vegetable Oil Producers and Processors of Oil Products in Bulgaria

Spirits Bulgaria — Association of Producers, Importers and Traders of Spirits in Bulgaria

Union of Brewers in Bulgaria

Union of Fruit and Vegetable Processors

Union of Poultry Farmers in Bulgaria