Lyubomir Nokov, co-founder ofHarmonika, speaking on the Business Start programme
Recent amendments to Bulgaria's Consumer Protection Act and Competition Protection Act are unlikely to bring food prices under control any time soon. According to Lyubomir Nokov, co-founder of Harmonika, policymakers are looking for answers in the wrong place — the problem runs far deeper and is rooted in a range of structural issues. Nokov shared his views with host Hristo Nikolov on the Business Start show.
Nokov argues that food prices are shaped by both local and global forces — energy costs, labour markets, and the level of risk and uncertainty that businesses perceive in the sector.
He highlighted that a significant share of Bulgaria's food producers depend on natural gas, as do the fertiliser manufacturers they rely on. Gas prices have risen by roughly 40% in recent months alone. At the same time, a chronic labour shortage and rising wage costs have put producers in direct competition with the public sector — particularly in smaller towns and villages.
"Public sector salaries are growing faster than those in the private sector. In smaller communities, farmers and food producers find themselves competing with local councils just to hire staff. That drives up the cost of labour sharply — and that cost feeds straight into the price of food."
Compounding the problem are climate pressures: poor harvests, recurring droughts, and a crumbling irrigation infrastructure that leaves producers operating in a climate of constant uncertainty.
"When the government starts talking about price controls, that sense of risk intensifies. And risk costs money. It drives out competition, discourages investment, and ultimately pushes prices even higher."
Nokov is unconvinced that monitoring prices across the entire supply chain — from farm to retailer — is either practical or effective. He describes it as an enormous administrative burden that does nothing to address the underlying drivers of inflation.
He is equally sceptical about capping retail markups, pointing to international precedents where such measures have backfired — accelerating inflation rather than taming it, and creating supply shortages.
"Compare Hungary's experience with countries like Switzerland or Sweden and the contrast is stark. Hungarian food inflation peaked at nearly 80%, while other countries kept it in single digits."
For a similar approach to succeed in Bulgaria, he argues, would require nothing short of a miracle.
Nokov noted that in recent years, large retail chains have borne the brunt of regulatory scrutiny and inspections. If market distortions or anti-competitive behaviour do exist, he believes the investigation should extend much further back along the supply chain.
In Nokov's view, the real solution lies in building a stable, predictable business environment and fostering genuine competition. That means investing in irrigation systems, adapting to climate change, cutting red tape, reforming the subsidy model, making it easier to hire workers, speeding up work visa processing, and revisiting VAT on food — which he describes as a regressive tax that hits the lowest earners hardest, since they spend the greatest share of their income on food.
www.bloombergtv.bg"There was language in the proposed legislation suggesting that businesses would be considered guilty unless they could prove their innocence. That flies in the face of basic legal logic and European principles — and frankly, it reflects how much of the public administration views this entire sector."
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