TO
MR ALEXANDER PULEV
DEPUTY PRIME MINISTER AND
MINISTER OF ECONOMY, INVESTMENTS AND INDUSTRY

Via: Public Consultations Portal (strategy.bg) — Consultation No. 12633

COPY TO:
Office of the Prime Minister
Minister of Agriculture and Food
Consumer Protection Commission
Commission for Protection of Competition

POSITION

of the Bulgarian Association of Dairy Processors (BAM), UIC 206442155

on the package of measures for food price control

SUBJECT:

(1) Draft Ordinance on the terms and procedure for keeping, maintaining and using the electronic central register for supply-chain traceability (Public Consultation No. 12633, deadline 18 September 2026); and

(2) Draft Decree of the Council of Ministers adopting a Methodology for determining the fair value of goods under Article 68p(6) of the Consumer Protection Act (Public Consultation No. 12597).

This consolidated position is submitted within the deadline for Consultation No. 12633.

DEAR MR DEPUTY PRIME MINISTER,

The Bulgarian Association of Dairy Processors (BAM) brings together 55 dairy-processing enterprises which process a significant share of the raw milk produced and purchased in Bulgaria. Dairy products fall within the scope of both measures and our members are therefore directly affected. Pursuant to Article 26(2)–(5) of the Statutory Instruments Act, we hereby submit this position.

The two draft instruments — the traceability register and the Fair Value Methodology — are two parts of the same price-control regime introduced through amendments to the Competition Protection Act and the Consumer Protection Act. We therefore consider them together.

BAM strongly disagrees with this regime in the form proposed. It imposes a disproportionate and practically irreversible administrative burden, duplicates information already available to public authorities and creates a risk of increasing prices — the opposite of the intended effect.

The stated objectives can be achieved through the State’s existing instruments — the National Revenue Agency / sales management software systems, the Bulgarian Food Safety Agency and the Commission for Protection of Competition — without creating new parallel databases and administrative burdens.

PART A — Draft Ordinance on the Electronic Central Register

Consultation No. 12633

With regard to the register, BAM insists that the draft Ordinance should not be adopted.

The reasons are as follows.

Disproportionate and irreversible administrative burden and volume of data

Dairy processing involves the daily production of perishable food products, a broad product range and a high frequency of dispatches.

The requirement to enter, within 72 hours — or, where dispatch occurs earlier, by the time the goods leave the premises — price and cost data, discounts, margins and accompanying documents for every batch and every delivery creates a volume of reporting unparalleled in the legislation currently in force.

For a single medium-sized enterprise with approximately 200 products and dozens of daily dispatches, this would mean dozens of records every day and, annually, more than one hundred thousand individual records, each containing multiple price and cost components and attached documents.

Multiplied across the 55 enterprises in the sector — the majority of which are SMEs — this burden becomes unsustainable and irreversible. It requires permanent administrative resources which small and medium-sized dairy processors do not have and cannot be remedied through partial amendments to the wording.

The objectives can be achieved through instruments that already exist

The State already has the necessary information:

• through the National Revenue Agency and sales management systems under Ordinance H-18 — prices, quantities and documents;
• through the Bulgarian Food Safety Agency — batch traceability under Article 18 of Regulation (EC) No 178/2002;
• through the Commission for Protection of Competition — sectoral analyses.

Creating a fourth, duplicating register is contrary to the principle of proportionality under Article 6 of the Administrative Procedure Code, the “once-only” principle under Regulation (EU) 2018/1724 and Article 2 of the Electronic Governance Act.

In the alternative — only if, despite the above arguments, the register is nevertheless created — we insist on the minimum amendments set out below, while emphasising that they do not overcome our fundamental objection to the creation of the register itself.

1. Obligation to disclose cost price, discounts and margin — interference with trade secrets

Annexes No. 2 and No. 3 require the entry of the unit supply price excluding VAT after deduction of all costs, commercial discounts and bonuses, as well as the amount of profit and mark-up.

This information constitutes a trade secret within the meaning of the Trade Secrets Protection Act, which transposes Directive (EU) 2016/943.

Its centralised collection creates a risk of disclosure and distortion of competition, including competition between the obligated entities themselves.

Proposed amendment: remove the requirement to report cost-price components and individual margins; the register should collect only prices actually applied and quantities.

If the requirement is retained, explicit statutory safeguards should be introduced concerning trade-secret treatment, a strictly limited circle of persons authorised to access the information and a prohibition on republication.

2. Excessive administrative burden and duplication of data already submitted — violation of the “once-only” principle

A major part of the required information — invoices, quantities, supply prices and selling prices — is already submitted to the State through the National Revenue Agency under tax legislation and through sales management systems under Ordinance H-18.

Batch and traceability data are already available to the Bulgarian Food Safety Agency pursuant to Article 18 of Regulation (EC) No 178/2002.

Creating a parallel channel for the same information constitutes unjustified double reporting and imposes a disproportionate burden on businesses, contrary to the principle of proportionality under Article 6 of the Administrative Procedure Code.

The requirement is also contrary to the “once-only” principle laid down in Regulation (EU) 2018/1724 and Article 2 of the Electronic Governance Act, which prohibits administrative authorities from requiring persons to provide data that are already held by another authority.

Article 10 of the draft provides for information exchange with public administrations but, inexplicably, excludes the National Revenue Agency.

Proposed amendment: Article 10 should establish mandatory automated official data exchange with the National Revenue Agency, the Bulgarian Food Safety Agency and the Customs Agency. The register should be populated automatically from existing information systems in accordance with the “once-only” principle.

3. Legal uncertainty caused by subjective concepts and the absence of a statutory methodology for “costs”, “profit” and “mark-up”

The draft uses the concepts of “costs”, “profit” and “mark-up”, while the related regime under the Competition Protection Act uses concepts such as “unjustifiably high price” and “reasonable profit margin”, without objective and measurable criteria or a uniform methodology.

The allocation of costs to a specific product or batch may be performed in different legitimate accounting ways; the same factual situation may therefore result in different but equally defensible values.

This uncertainty violates the principles of legal certainty and predictability under Articles 4 and 12 of the Administrative Procedure Code and is incompatible with administrative penal liability.

Under Article 6 of the Administrative Violations and Sanctions Act, the constituent elements of an infringement must be established clearly and in advance. A sanction under Article 100a of the Competition Protection Act based on an undefined standard cannot objectively be applied in a legally defensible manner.

Proposed amendment: before the obligation enters into force, a clear, objective and uniform methodology for determining costs, profit and mark-up should be adopted. Until such methodology has been adopted, sanctions under Article 100a of the Competition Protection Act should not be imposed in relation to those indicators.

4. Impracticable 72-hour deadline and “time of departure” requirement for perishable dairy products

Article 13(1) requires data to be entered within 72 hours of placing the product on the market and, where dispatch takes place earlier, no later than the time at which the goods leave the premises.

Dairy processing involves daily production with dozens of dispatches each day, including dispatches processed through EDI systems. Entering information “at the time of departure” is operationally impracticable.

Proposed amendment: aggregated daily or periodic reporting by customer and product should be permitted; the deadline should be no shorter than five working days; operators using EDI or sales management systems should be permitted to submit the information automatically from their systems.

5. Specific nature of the raw material — the cost of a dairy batch is determined only after monthly settlement

The purchase price of raw milk is negotiated and settled on a monthly basis, depending on quantity, fat content and quality.

The exact raw-material cost of the finished batch is finalised weeks later. Consequently, a requirement to provide cost data “in real time” is incompatible with the technology and settlement model used in the sector.

Proposed amendment: for raw materials subject to subsequent or monthly pricing, reporting of an estimated value followed by subsequent correction should be permitted, without such correction being regarded as “false information” under Article 100a of the Competition Protection Act.

6. Unclear product scope of Annex No. 1

Annex No. 1 lists groups such as milk and dairy products without precise reference to the Combined Nomenclature (CN), creating uncertainty as to exactly which products — including semi-finished products and by-products such as whey — are subject to reporting.

Proposed amendment: Annex No. 1 should contain an exhaustive list of CN codes, and by-products and internal production semi-finished products should be expressly excluded.

7. Absence of technical specification, machine interface and transition period

The draft does not regulate data formats, submission methods or the availability of an application programming interface (API/EDI) for integration with accounting and ERP systems.

Without such functionality, the obligation would have to be performed manually, creating errors and additional costs while businesses remain exposed to sanctions.

Proposed amendment: a public, free-of-charge machine interface (API/EDI) and standardised formats should be provided; the requirements should enter into force only once technical readiness has been achieved and after a transitional grace period of not less than six months.

8. Data protection, retention period and cybersecurity

The centralisation of sensitive commercial and personal data, including data concerning agricultural producers who are natural persons, creates significant risks.

Article 17 provides for data retention without establishing clear retention periods or adequate safeguards under Regulation (EU) 2016/679 (GDPR).

Proposed amendment: introduce a maximum retention period proportionate to the objectives; explicitly define the controller and processor; establish access logs, cybersecurity measures and the rights of data subjects under the GDPR.

9. Presumption of guilt and reversal of the burden of proof — automated AI analysis under Article 16

Article 16 provides for automated identification, including through artificial intelligence, of “indicators” and alerts to the competent authorities.

Combined with the regime under the Competition Protection Act, this shifts onto the obligated person the burden of proving the “justification” of its prices, contrary to the presumption of innocence under Article 31(3) of the Constitution and Article 6(2) of the European Convention on Human Rights, which are also applicable in administrative penal proceedings.

An automated conclusion without human assessment, reasoning and an opportunity to object violates the right to good administration under Article 59 of the Administrative Procedure Code and, as regards personal data, Article 22 of Regulation (EU) 2016/679.

Proposed amendment: automated alerts should serve solely as internal indicators for inspection and should not constitute grounds for imposing sanctions; the burden of proof should remain with the supervisory authority; the operator should be provided with notification, reasons and a period in which to submit objections.

10. Proportionality and relief for small and medium-sized enterprises

A large proportion of dairy processors are SMEs, for which the relative burden is considerably greater. No differentiated relief is provided for producers.

Proposed amendment: differentiated requirements and a simplified regime concerning the volume and frequency of reporting should be introduced for SMEs in accordance with the principle of proportionality and the “Think Small First” principle.

PART B — Draft Fair Value Methodology

Consultation No. 12597

We associate ourselves with the position of the national sectoral organisations that are members of the National Food Council, dated 2 September 2026, and fully support it.

BAM strongly disagrees with the adoption of the Methodology in the form proposed and insists that it should not be adopted.

We supplement the joint position with the following dairy-sector-specific considerations.

1. Aggregated commodity-exchange data for categories instead of actual prices of specific products

The Methodology determines the fair value of specific products but relies on aggregated data from the State Commission on Commodity Exchanges and Markets for broad categories.

The category “milk and dairy products” includes heterogeneous products such as:

• fresh milk — 1.5–3.6% fat, lactose-free, goat’s milk;
• yoghurt — cow’s milk yoghurt with 2.2%, 3.6% or 4% fat, sheep’s milk yoghurt, Bulgarian State Standard products, lactose-free products;
• cow’s milk cheese — white brined cheese, kashkaval and curd cheese.

A single average value does not reflect the real value of an individual product and is misleading to consumers.

Proposal: fair value should be determined for a limited number of the most frequently consumed, clearly defined products, based on anonymised actual supply prices with full trade-secret safeguards, following an OFPM-type model, or by using data already available to the National Revenue Agency.

2. “Anchor product” and “first price line principle” — pressure on high-quality Bulgarian dairy products

Using the lowest price segment, predominantly retailers’ private-label products, as the benchmark artificially suppresses value and encourages a “race to the bottom” in terms of quality.

This affects high-quality Bulgarian dairy products and producers contracting with local farmers most severely, discouraging investment in quality, standards such as the Bulgarian State Standard (BDS) and product origin.

Proposal: the “anchor product” should be defined as the representative product — the product with the largest share by volume — rather than the cheapest product.

The “first price line principle” should be replaced with a “most frequently consumed product principle”, for example “cow’s milk yoghurt with X% fat content”.

3. Exceeding the statutory delegation and introducing disguised price regulation

The fair value under Article 68p(5) of the Consumer Protection Act is expressly stated to be of an “indicative nature”.

The introduction of additional functions in Article 1(2)–(4), and particularly a 10% range beyond which “monitoring is envisaged”, establishes disguised maximum prices and interference in price formation, exceeding the statutory delegation under Article 12 of the Statutory Instruments Act.

The “adjustment factor” under Article 7(3) constructs an implicit ex-works price, which likewise goes beyond the subject matter of the statutory delegation.

Proposal: Article 1(2)–(4) and the “adjustment factor” should be removed. The Methodology should remain within the indicative nature of the indicator established by law.

4. “Fair gross margin” and target EBIT — a company-level indicator applied to an individual product

The target EBIT derived from consolidated data of European retail chains is a company-level indicator and cannot mechanically be transferred to an individual product.

For dairy products, the raw material represents the predominant share of production cost and margins are low. An averaged target margin therefore distorts the result.

Furthermore, a margin calculated on turnover is applied as a mark-up on the supply price, even though the two concepts are not interchangeable.

Proposal: margins should be based on actual data for the Bulgarian market by product group. The sources of the values used should be identified in a verifiable manner, including year, table and page.

5. Raw-material cost of dairy products is determined after monthly settlement

The purchase price of raw milk is negotiated and settled on a monthly basis.

The exact raw-material cost is finalised weeks after production, meaning that determining a “fair value” in real time is incompatible with the operating model of the sector.

Proposal: the Methodology should take account of subsequent or monthly pricing of raw milk and should not treat subsequent adjustments as deviations.

6. European price benchmark — Component B — unpredictable selection of Member States

The reference group of countries is selected without a clear principle, and different configurations produce results differing by more than 10%.

Article 68p(6) of the Consumer Protection Act requires EU Member States, which, where neighbouring countries are concerned, effectively limits the comparison to Romania and Greece.

The choice of countries determines 50% of the final result.

Proposal: the countries should be selected for each specific product on the basis of similarity of production and market structure, according to clear and verifiable criteria. VAT should be deducted in nominal terms.

7. Legal uncertainty resulting from private paid sources and equal 50/50 weighting

Key parameters are derived from private, paid and unverifiable sources — McKinsey/EuroCommerce for EBIT and NielsenIQ for retail prices — to which the affected persons do not have access.

This makes the indicator impossible to challenge effectively and legally vulnerable.

The equal 50% weighting of the two components under Article 6 also lacks an economic justification.

Proposal: all input data should be publicly available and verifiable, and the weighting between the components should be economically justified.

8. Risk of facilitating coordinated practices and increasing prices

Daily publication of item-level prices in a uniform format across all retail chains, combined with a median price by category, creates symmetrical transparency among competitors and facilitates tacit coordination.

Where the “fair value” is higher than actual market prices, it may operate as a focal point and lead to price increases — the opposite of the intended effect.

Proposal: publication directed towards competitors should be discontinued; transparency should be designed solely for the benefit of consumers.

GENERAL CONCLUSION — on the package of measures

The Bulgarian Association of Dairy Processors insists that the draft Ordinance establishing the register should not be adopted and that the draft Methodology should not be adopted in the form proposed.

Taken together, the two measures create a disproportionate and irreversible burden, duplicate information already available to the State and risk increasing prices rather than limiting them.

The stated objectives can be achieved through the State’s existing resources — the National Revenue Agency, sales management systems, the Bulgarian Food Safety Agency and the Commission for Protection of Competition — without creating new parallel databases.

We are ready to provide expertise and data and to participate in consultations concerning policies in the food sector.

Respectfully,

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Dimitar Hristov
Chairman of the Management Board
Bulgarian Association of Dairy Processors (BAM)
UIC 206442155

46 Izgrev Street, Sliven
Tel.: 0888 864 444
E-mail: [email protected]

14 September 2026