Competition Protection Commission investigates milk sector

At the end of 2010 the Competition Protection Commission initiated an investigation into the milk sector. Its main areas of investigation were:

• the mechanism for the allocation, use and transfer of milk production quotas;
• the price of raw milk;
• approved purchasers;
• dairy processors and the role of their associations; and
• the distribution chain of dairy products, in particular the role of large retailers in the milk supply chain.

The commission found significant asymmetry between the market level of raw milk production, on the one hand, and the level of raw milk purchasers and dairy farms, on the other. The raw milk purchasers and dairy farms enjoy a stronger market position and are therefore in a position to impose unfair purchase prices on raw milk and other trade conditions on raw milk producers.

According to the commission, the Bulgarian milk market suffers from similar problems to the equivalent markets in other EU member states. For this reason, in its final decision the commission cited the conclusions of the European Commission and its recommendation that these problems be solved by implementing changes to EU common agriculture policy and the applicable national and EU competition laws.

For further information on this topic please contact Ilko Stoyanov at Advokatsko Druzhestvo Andreev Stoyanov & Tsekova in cooperation with Schönherr Rechtsanwälte GmbH by telephone (+359 2 933 1072), fax (+359 2 986 1105) or email (i.stoyanov@schoenherr.bg).