The Commission for protection of competition launches a sector inquiry to examine the competitive environment on the national markets of production and trade of sunflower oil and wheat flour

The procedure is launched on the initiative of the CPC with Decision № 292/14.04.2022

The food manufacturing and trade sector is constantly observed by the Commission in recent years, especially after the breakout of the Covid-19 pandemic and the economic restrictions that came with it. Those restrictions affected in a large way the food trade sector. Domestic food prices are showing a lasting upward trend in 2021 compared to previous years. As of the beginning of 2022, the tendency remains as the international economic situation affects at large the price-determining factors.

Following an alert from the Commission on consumer protection and multiple media publications and reports on the tense situation with the sharp increase of the sunflower oil prices in the beginning of march 2022, the CPC began a preliminary investigation of the markets for manufacturing and trade with first necessities foods according to article 38 of the Law for protection of competition. In the framework of the investigation information and documents were gathered from the large retailchains, the Customs agency and others. Aiming to establish the reasons for the price increase of the products from the daily shopping basket of consumers the Commission held meetings with the sector branch organizations.

In order to grasp the full value chain, from manufacturing raw material to the end sale of the final product and constructing a detailed analysis of the competitive environment on all levels, the CPC focused its observation on the wheat grain and sunflower and the production of wheat flour and sunflower oil.

The data shows that the rise of retail prices is a result of the rise of wholesale prices. This calls for a detailed analysis of the direct dependency that exists between the price of the end products – wheat flour and sunflower oil and the price movement of the raw material for their manufacturing - wheat grain and sunflower, as well as of the other factors affecting the formation of prices.

The purpose of the inquiry is to establish the structure of the market, the market setting for manufacturing and trade with wheat flour and sunflower oil. The analysis will follow/ monitor to what extent the price tendencies are influenced by objective economic factors or if they are a result of distortion of the market setting due to possible anticompetitive practices which can lead to competition intrusion in linked markets and unjustified price increase.

The full text of the decision is available in the public electronic register of the CPC on this Internet address: https://reg.cpc.bg