site.btaAssociation for Modern Trade’s Valkanov Anticipates Key Role for Retailers in Euro Transition

Retail trading will play a particularly responsible role in January 2026, when both the lev and the euro will be legal tender, Executive Director of the Association for Modern Trade Nikolay Valkanov said in an interview with BTA’s Veselina Yordanova on Thursday.

He added that during this period, all cash remaining in the economy will effectively be withdrawn through retail traders.

Valkanov noted that every company in the Association for Modern Trade has made significant investments in preparing for the euro’s introduction, ensuring compliance with legal requirements and a smooth transition to the new currency.

He said proposals for State intervention in pricing pose major risks, citing Hungary, Romania, and Croatia as examples where such measures led to higher inflation than in Bulgaria following their adoption.

“Anyone who attempts such a move will fall victim to their own immaturity. Efforts to manipulate the market are always felt by the end consumer, and there is no way this will keep them satisfied,” Valkanov said.

He believes closer attention is needed to how food moves from farm to table, what is produced, what is imported, what is exported, and the reasons behind these trends.

“Prices on the shelf are a result of many processes and phenomena further down the chain, over which the retailer has no influence, or only very limited influence,” Valkanov added.

Below is the full text of the interview:

What investments have companies in the Association for Modern Trade made, or plan to make, in connection with the introduction of the euro in Bulgaria from January 1, 2026, and the requirements for business? Did you encounter any difficulties and, if so, what are they? At what stage is the process?

Large retailers are each investing hundreds of thousands to modify ERP, accounting and other software, retune cash registers, and redesign and upgrade online and offline platforms. Every company has made significant investments to prepare for the euro’s introduction so as to comply with legal provisions and ensure a smooth transition to the new currency. Last-minute changes to the Law on the Introduction of the Euro created some stress in the system, but we do not expect difficulties.

We are already working on the initial supply of retailers with euro banknotes and coins. Retail will have a particularly responsible role in the first month of 2026, when both the lev and the euro will be legal tender. During that period, cash remaining in the economy will, in practice, be withdrawn through retailers.

The Commission on Protection of Competition (CPC) seeks additional data from retail chains for its sector analysis of the food market and promotions of basic products for the period from July 21 to August 3, 2025. Changes to the Law on the Introduction of the Euro, as well as planned amendments to the Supply Chain Act, also affect pricing and promotions. How would you comment? What does a cap on markups mean in practice?

Retailers have been under constant checks for two and a half years. During this period CPC oversight has not stopped. It is important to strike a balance in oversight because, when it turns into excessive control as we have seen attempted, it harms both businesses and State authorities, which lose consumer trust.

Retail is an important sector, the second-largest employer, providing goods and services and forming part of the country’s food security. But it should be clear that a retailer’s main job is not to produce endless reports, data and supplier contracts; the job is to sell while strictly complying with the law.

As for ideas for State intervention in pricing, the risks are huge, history shows it, and so does the recent experience of Hungary, Romania and Croatia, which recorded higher inflation than Bulgaria after such measures were introduced. Hungarian consumers suffered the highest inflation in the EU while everything was tried on their backs, from price controls and extra taxes on trade to caps on markups.

Anyone who attempts such a move will fall victim to their own immaturity. Attempts to manipulate the market are always felt by the end consumer, and there is no way this will keep them satisfied. A cap on markups is the same as telling you: from tomorrow you must live on BGN 300 a month. No one asks what your actual costs are, or how you will cope.

Does showing prices in lev and euro guarantee that consumers are well informed? Is that enough? Would you, as a sector, make proposals in this direction?

Mandatory dual display of prices in euro and lev aims to inform consumers and help them prepare before the final switch to the euro as Bulgaria’s official currency. Product labels contain the information customers need to understand product value, along with other mandatory consumer information. It is important for all retailers that consumers are well informed about the transition and can easily orient themselves in stores, so we are working to inform them through our communication channels and by assisting them in stores whenever needed.

There are numerous proposals for pricing websites, publication of prices by retailers, and similar initiatives aimed at increasing consumer awareness of the most affordable options. However, greater focus should be placed on the entire food supply chain, how products move from farm to table, the journey of items like milk or tomatoes, what we produce domestically, what we import or export, and the underlying reasons. Attention should also be given to relevant policies and the allocation of billions in EU agricultural subsidies. Retailers are often blamed for the prices of products like bread or cheese, but they represent only the final stage in a complex chain. Shelf prices result from many preceding processes and factors over which retailers have little or no control.

The government has approved the establishment of a state-backed company, People’s Store, which will focus on the sale of food and industrial goods. The company will prioritize products from Bulgarian producers, including those based in smaller communities, and aims to offer goods at affordable prices to consumers. What is your assessment of this initiative, and do you anticipate that such a market entrant would create competition?

It might have been more reasonable to allocate BGN 200,000 instead of BGN 10 million and create a museum exhibit in the centre of Sofia, a grocery shop from the socialist era. With half-empty shelves, a limited range and a grumpy shop assistant explaining that there is no meat at the butcher’s and no cooking oil at her counter.

Many aspects are overlooked here, including the State aid framework in the European Union. Unfortunately, some producers continue to believe that the State is required to purchase their goods at guaranteed prices, regardless of the quality or method of production. This is not the case, and I believe consumers have long ago figured out how the market operates.