SOFIA – Less six months after adopting the EU’s single currency, Bulgaria finds itself with the eurozone’s highest inflation rate – and a new government trying to prove it can tame food costs without imposing price controls.

Bulgaria adopted on 1 January 2026, fears of soaring prices have only intensified as inflation had accelerated, putting Bulgaria’s Prime Minister Rumen Rade under direct pressure as he took office with a clear mandate: do something about food prices.

The country’s annual consumer price index reached 6.8% in April, accelerating sharply from 4.1% a month earlier – the highest year-on-year figure since August 2023 among eurozone member.

Among food products, tomatoes rose 28.8%, peppers 24.8%, and cabbage 18.3% compared to a year earlier.

Government priority

In his first public remarks as prime minister, Radev pledged not to impose price caps but to use “all the tools of the market economy” to curb inflation, including tighter oversight of retailers and tougher sanctions for unjustified price hikes.

The legislative package, tabled by Radev’s left-wing populist Progressive Bulgaria lawmakers three days after the government took office, follows two tracks.

First, amendments to the Bulgaria’s Consumer Protection Act would require large retailers to prove price increases are linked to objective economic factors rather than speculation, while introducing a “fair price” indicator. Fines would range from €1,000 to €10,000 for individuals and €10,000 to €100,000 for retailers.

Separately, changes to the legislation would expand the list of banned unfair commercial practices from 13 to 33 and strengthen the the national anti-monopoly commission’s investigative powers.

Both bills passed their first parliamentary reading in May. With 131 seats in the 240-member parliament, the government is expected to secure final approval before the measures enter into force in August for a one-year period.

Officials insist the aim is not direct price regulation but greater transparency and stronger enforcement against unfair practices. Radev said the framework was partly inspired by German legislation focused on price transparency and competition oversight.

A contested response

In Sofia, the draft laws immediately drew criticism from trade unions and business groups, which said they had not been given enough time to analyse the proposals.

Employers’ organisations withheld support, warning against heavier regulation and greater state interference in market mechanisms.

Opposition leader and former finance minister Asen Vassilev argued earlier this month the measures could ultimately push prices higher, saying similar interventions during Bulgaria’s euro transition preparations had failed to contain costs.

Bulgaria’s Competition Protection Commission said in February it had found no evidence of anti-competitive agreements among major retail chains – raising questions over what exactly the new legislation is designed to tackle.

Dimitar Sabev of the Bulgarian Academy of Sciences’ Institute for Economic Research also questioned parts of the package.

“Some of the proposed changes to the competition law give an advantage to large Bulgarian producers in their constant battles with retail chains”, he said, warning that retailers could ultimately pass the costs on to consumers.

Meanwhile, Lyubomir Datsov, a former deputy finance minister, argued the government was conflating high food prices with inflation more broadly.

“Bulgaria’s inflation is not driven by the euro – if it were, it would not be many times higher than the eurozone average,” Datsov said.

Instead, he pointed to rapid wage growth outpacing productivity and persistent budget deficits boosting domestic demand.

“To tame price dynamics, you need fiscal tightening,” he said, arguing the deficit would need to fall towards 1% of GDP. “The measures proposed by the new government do not address price dynamics at all.”

Been there, done that

Europe’s track record with price interventions offers little reassurance. Where governments have stepped in, measures have often shifted costs elsewhere, triggered legal concerns in Brussels or faded without lasting impact.

Hungary went furthest, introducing a 10% cap on retail profit margins for 30 staple food products in 2025. The European Commission subsequently challenged the measure, arguing it discriminated against foreign retailers and violated single market rules.

Romania and Greece adopted softer approaches. Bucharest capped markups across parts of the supply chain, while Athens temporarily restricted discounts on products that had recently seen price increases – prompting some retailers to avoid hikes altogether to preserve promotional flexibility.

Bulgaria is therefore not the first European government to turn to regulation over food prices, but as the eurozone’s newest member – and currently the bloc’s highest-inflation economy – the stakes are higher.

The government likely has the votes to pass the legislation. However the bigger question is whether it can bring down prices at the checkout.

Maria Simon Arboleas contributed to reporting.

(adm, cs, bw)