These days, the Bulgarian parliament has voted on amendments to the Law on Protection of Competition (LPC) that became known as "Anti- chain store law."

It was actually the third consecutive voting on these amendments in parliament. They were stopped in the previous National Assembly by President Rosen Plevneliev, who said that the social effect of the amendments was unclear and that prices could rise.

It is a fact that measures must be taken to limit unfair trade practices and ensure equality between the contracting parties, but the EU has no common policy on the issue. Each Member State introduces mechanisms to deal with the issue according to local conditions. In most cases, the business relies on certain codes of conduct and settlement of relations through mediators.

Left-wing parties have proposed changes that would introduce the concept of "a significant market power" when describing a company that could might hinder competition because of its market share, since suppliers and buyers are dependent on it. The criteria for "significant market power" will be set after using specific methodology. According to economist Petar Ganev from the Institute for Market Economics (IME), the main problem of the legislative amendments is the lack of clarity. There is no definition of "significant market power" and there are no specific instructions about the actions the Commission for Protection of Competition should take:

“All unclear points make assessment of the effect of amendments very difficult. One thing is certain - greater power is given to the CPC. We see that many issues that cause social tensions are transferred to the CPC. The Commission is expected to protect certain political populism, without having any real means of intervention. With these changes the commission is given instruments that allow it to act. Concerns are related to the fact that a supervisory body could become an institution of political populism.”

Besides the possibility of the CPC being loaded with political functions, the changes could also bring a threat of restricted competition and rising prices.

Yordan Mateev, executive director of the Modern Retail Association, whose members include representatives of the chain stores, said that changes would not be beneficial to small producers and customers. He believes that over-regulation will encourage retailers to stop working with Bulgarian producers and to increase imports.

Mateev added that the law protected the lobbying interests of someone who wants to enter the Bulgarian market using unclean money, but did not mention any specific name. He said that modern trade shortened the link between manufacturers and customers and this way prices decline. By prohibiting this model, prices will rise. Estimates of the association suggest that prices will rise between 3 and 5 percent. Proposed restrictions on the provision of services, such as a central warehouse, will have negative effect on small producers who will have to transport their goods to retail chains themselves.

Promoters of the changes have the noble intentions of protecting local production and eliminating unfair commercial practices, but economists and the business say there was a danger of over-regulation that could disturb the market.

Last but not least, the relationships between retailers and their suppliers these days are much better in comparison to the situation in the past, when the amendments were written. According to marketing agency ICAP, 2014 was the sixth consecutive year in which the market for fast-moving consumer goods (FMCG) continued to shrink.

English: Alexander Markov