The fair price of 20 essential goods will be checked on a website.
This was explained in the program "Speak Now" on BNT by the chairman of the parliamentary committee on budget and finance, Konstantin Prodanov from "Progressive Bulgaria". "First of all, let's say that between the first and second reading we changed the name from "fair price" to "fair value". Because the price is what you pay, and the value is what you get for it. I heard many accusations that this was non-market. In fact, this is in Article 102 of the Treaty on the Functioning of the European Union, which prohibits the abuse of a dominant position. And one of the things that is prohibited there is precisely the imposition of unfair prices. In English it is unfair prices, in Bulgarian it is sometimes translated as unfair prices, but in fact it is about unfair — i.e. those that have no connection with the economic value of the product. But this is an imperative prohibition in the Treaty on the Functioning of the EU. It will be published on an internet portal for a limited range of goods — about 20 essential goods. The state will calculate according to a methodology that is currently being developed and will be adopted by the Council of Ministers. It is based on two approaches. One is a comparative criterion — similar products are looked at in other EU member states, taking into account differences in VAT and purchasing power. The other approach is the “cost plus“ principle — wholesale price plus operating costs, logistics, wages, defects, mark-up and normal trade mark-up. This provides a reference value that serves as a guide for the consumer. This is not a price ceiling and it is not a price floor. The goal is to overcome the information asymmetry that currently exists," he added.
Prodanov explained in detail the introduced ban on increasing prices and services for a period of one year without being economically justified.
"This is simply a continuation of the already existing ban in the Euro Law. It is not a ban, in fact, but a requirement for justification with economic facts when prices are increased. Some of the price increases occurred even before the law was introduced. In fact, the problem was that there was a transitional period before it was introduced last year, when traders used the moment to sharply raise prices without explaining themselves. Recently, there have been price increases that are economically justified by objective external factors, such as the crisis in the Middle East, the pro-cyclical and pro-inflationary policy of the state through the budget sector, the credit expansion, which is currently very noticeable in the banks and which can be said to be inflating bubbles in certain sectors. All of this is pro-inflationary in nature. This is a valid reason for raising prices, but along with it there are also unfounded reasons for raising prices. This is the so-called speculation or an attempt to "fish in murky water". We are trying to prevent this, as with the extension of this ban, there were already enough indications that many traders are preparing to sharply raise prices immediately after its expiration in August. By the way, foreign experience also shows that in countries that have gone this way when adopting the euro after the initial transitional period of dual denomination, there are some inertial processes that continue even after that. And that's why it's good to manage this process, not let it get out of control," concluded Konstantin Prodanov.