site.btaBread Price Cuts Fall Short of Consumer Expectations

Bread price cuts are far less significant than what was promised and what consumers expected. A volatile economic situation this coming winter would cause bread and flour prices to rise again and would bring consumers back to where they were in the early summer, according to an express survey conducted by the Institute for Social and Trade Unionist Studies (ISTUS) at the Confederation of Independent Trade Unions in Bulgaria (CITUB) between August 29-31, 2022, the Confederation reported on Tuesday.

This is the ISTUS' second express survey on changes in bread and flour prices after VAT for the two types of products was set at zero as the state budget was revised early in July. The survey covers small and large retail outlets in 22 of Bulgaria's 27 regional capitals.

It shows that by August 29-31 bread prices decreased by between 1% and 11% compared with the end of June, and flour prices dropped by between 8% and 11%.

The findings confirm the uneven nature of price changes across Bulgaria. Larger retail chains tend to report more considerable cuts on the prices of various types of bread, particularly those which contain a mix of seeds or other additional ingredients. Smaller outlets, with their specific characteristics concerning consumer demand, agreements with bakeries and profit margin, can afford a relatively smaller decrease in the price of bread, specifically on the most widely consumed types.

There is also a geographical dimension to price fall differences. In such towns as Yambol, Dobrich, Haskovo, Ruse and Burgas, bread prices have decreased more significantly (including in small stores) than in other places.

The introduction of zero VAT on bread and flour, as an anti-crisis measure, costs the public purse about BGN 100 million annually and has proven insufficient. It is uncertain whether these prices will remain at the current levels, considering producers' fears regarding the coming autumn and winter, the CITUB commented.