According to the chairman of AIKB, a price ceiling does not work well, it leads to a deficit
Prices are determined by the market, and when there are monopolies, they are determined by regulators. The Commission for the Protection of Competition is to prevent cartel entities that have great market power and are not a natural monopoly from having cartel or monopoly prices.
We have submitted reports to the Commission several times and they have never been considered in substance, AIKB chairman Vasil Velev told Bulgaria ON AIR.
According to him, the remarks against the CPC are well-founded, and at the moment the retail chains have significant market power. “Whether or not there is a cartel is difficult to determine, that’s why there are regulators. It is important for us to have greater transparency,” commented Velev to Bulgaria ON AIR.
According to him, there are no serious proposals for a price ceiling. “A price ceiling does not work well, it leads to a deficit, to a black market, to the disappearance of goods from the shelf.
If such a markup ceiling is introduced for a certain item that the lowest income strata use, the corresponding costs that cannot cover this ceiling in the chains may be passed on to other items. Thus, people with higher incomes will absorb this difference,” explained the chairman of AIKB.
If we compare inflation for January, we are not the country with the highest inflation, according to Velev.
“It is true that it is significantly above the inflation in the Eurozone, which we aim for, but it is lower than all the countries in the east and north-east around the Sofia-Berlin axis. In Hungary it is 28%, 15% in Slovakia, we are at 14 %. This inflation is not small, the reason for it is significantly higher than the European average.
The Bulgarian reasons are excessive spending, which was poured out by populism at the expense of increasing the country’s indebtedness. The second reason is the late compensations for the extremely high electricity prices,” he pointed out.
Velev announced that a working group has been created, and a decision is expected next week. “In order for prices to go down sustainably, we must have sustainable public finances. It is important that the budget for the year, which will be considered by the next National Assembly, be according to the guidelines of the EC,” he also said.
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