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Reducing the VAT rate to 9 percent for all food and drink would be an extremely useful measure to reduce price growth.

This opinion was expressed by the leaders of the Bulgarian Chamber of Commerce (BCC) and branch organizations from the food and beverage industry that are members of the chamber at a two-hour working meeting with the Minister of Economy and Industry Nikola Stoyanov

Nikola Stoyanov was born in 1976 in Sofia.

He graduated from the "Law" at the Sofia University and his team, reported the BSK.

The idea of ​​reducing VAT was supported by all the trade organizations present as a measure to contain and even lower the prices of food products.

The participants in the meeting were unanimous that there is no speculation in the prices, and the increase is the result of the high prices of raw materials and the impossibility of predictability caused by both internal and external factors.

All this inevitably leads to the calculation of risk in the final prices, therefore the business appeals for maximum efforts on the part of the state to limit the risks.

The meeting is at the invitation of the Ministry, after at the end of last week the nationally representative employers' organizations discussed the possibilities for reducing inflation and the accession of Bulgaria to the Eurozone with the acting Prime Minister Galab Donev, the Deputy Prime Minister and Minister of Transport and Communications Hristo Alexiev, the Minister of Finance Rositsa Velkova - Zheleva, and with the Minister of Economy and Industry Nikola Stoyanov

Nikola Stoyanov was born in 1976 in Sofia.

Graduated in Law at Sofia University.

Yana Ivanova from the Association "Food and Beverage Bulgaria" stated that "The increase in the prices of food products is due to the increase in the price of raw materials, the disrupted supply chains, the increased prices of fertilizers due to their lack, the much higher prices of packaging, the price of feed, and in some sectors there is a significant decline in turnover. However, according to data for September and October of FoodDrinkEurope, consumer prices of food in our country rose by 26 percent. In Hungary the increase was by 39 percent, in Poland , Portugal and Romania with 27 percent".

According to her, the state can provide support for controlling prices by providing predictability in terms of electricity prices and supplies, the mechanism for calculating the minimum wage (MW),

the processes for clarifying the economy and last but not least - by reducing the VAT on food.

A general reduction in the rate to 9 percent for all food and beverages would be an extremely useful measure to reduce the rise in prices, because as long as the conflict in Ukraine continues, prices are bound to continue to rise.

The reduction would also lead to clarification of the gray sector and declaration of the real turnovers, Yana Ivanova believes.

She appeals to study the Romanian experience, where from 22 percent, VAT became 9 percent and at the same time revenues in the treasury increased.

Restaurateurs insist that the VAT of 9% remains as a permanent measure

"We are a small, open economy and we are definitely not the creators of inflation - we import and export goods. Nearly 60 percent of our raw material is imported and this makes us very dependent," pointed out Tsvetan Iliev and Dilyana Popova from the Association of Meat Processors in Bulgaria.

They reported that there is huge competition in the sector, with over 200 companies being members of the Association.

"There is no predictability in feed, and the price of grain contributes to a 15 percent increase in pricing. There is only one state measure to support the processors of Bulgarian meat products. All this is among the reasons for the higher prices of the products." indicated the representatives of the Association.

Dimitar Mihailov from the Association of Pig Breeders in Bulgaria pointed out the influence of the African swine fever (ASF) factor.

"ASF collapsed throughout the European Union and on the world market the sale of pork, disrupted all business plans and supplies. Then the crisis deepened with the subsequent covid pandemic, which made things even more complicated. Because the pandemic and the pro-inflationary policies of the major countries led to an increase on the price of raw materials for the production of feed. And to date, the problems are also deepening because of the war in Ukraine, which has shot the prices of raw materials to even higher levels," Mihailov said.

According to the words, there is pressure on the sector from all directions - suspension of the export of the large European pig producers to China because of the African swine fever, there is also a ban in Italy,

which exports a large part of its production to the USA.

And so the unrealized quantities of meat remain in Europe and push down prices strongly, being in absolute opposition to the record high prices of feed, which form 70 percent of the cost of pigs, the three-digit sums of electricity and fuel, Mihailov said.

He predicted a very difficult market for pig farming until mid-2023, and to ensure the existence of this sector, he said, it was necessary for the state to pay the outstanding funds on time.

Daniel Bozhankov from the Association of Industrial Poultry Breeding pointed out that the price increase for chicken meat and eggs is nearly 30 percent.

The price increase is a result of feed prices, which from BGN 600 are now bought for BGN 1,250. Against this background, the sector was excluded from the crisis measures due to COVID-19, and in order to prevent the enterprises from going bankrupt even then, the producers are invested all available funds, said Bozhankov.

Ivana Radomirova from the Union of Brewers in Bulgaria reported that the average market price for one liter of beer in the store network is between BGN 1.80 and BGN 1.90. This is only a 5 percent increase since the beginning of the year against the background of energy prices and difficult supply chains, Radomirova added, and pointed out that producers point to the lack of predictability of the environment as a leading problem, both from the point of view of raw materials and because of the political situation itself.

The discussion on the possibilities of reducing the prices of food products will continue on Thursday, when the representatives of the Association for Modern Trade will also be present at the meeting at the Ministry of Economy and Industry.

Nikola Stoyanov

Bulgarian Chamber of Commerce

food and drinks

VAT