The Bulgarian government has published for public discussion a methodology for determining the so-called “fair value” of products, raising questions over whether the new mechanism will help curb unjustified price increases or simply document them. The proposal was discussed on NOVA NEWS by economist Assoc. Prof. Shteryo Nozharov and Vladislav Mihaylov, chairman of the Board of the Dairy Processors Association.
Mihaylov argued that the methodology was prepared too quickly and that its introduction requires a broader discussion. He nevertheless welcomed the planned one-month public consultation, saying it would give experts and representatives of the academic community an opportunity to contribute.
“It is very important first theoretically, and then practically, to implement a mechanism that would provide clarity and information to consumers,” Mihaylov said. He noted that economics already provides methods for calculating the production costs of individual companies and argued that a similar mechanism should be developed for the proposed system.
Nozharov, however, identified what he described as serious conceptual flaws in the methodology. He pointed to a contradiction in the government’s approach: the documents explicitly state that the mechanism is not intended to introduce a price ceiling, while also providing for monitoring, analysis and inspections when prices deviate from the calculated “fair value.”
