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It is high time that differentiated VAT rates on essential commodities are introduced, so that each Bulgarian consumer can afford bread

Interview of Mariana Kukusheva for the Bulgarian National Radio





 Interviewer, Bulgarian National Radio
Good afternoon to Mrs. Mariana Kukusheva, President of the Federation of Bakers and Confectioners in Bulgaria and Vice-President of the Council of Sectorial Organizations with BCCI. After the soaring price of electricity, there has been an increase in the price of wheat – how will all this affect the price of bread?

Mariana Kukusheva:
The price of bread, as well as the price of wheat, is a matter of market. Wheat pricing depends on its exchange price, which fluctuates across seasons especially during harvest. I would like to congratulate our colleagues grain-producers – currently Bulgarian wheat is highly in demand because of the excellent bread-making qualities of this year’s crop. The price of bread depends on the intermediate product made of wheat – flour. For now, there is no flour made from the new wheat crop available on the market. 

Interviewer, Bulgarian National Radio
You use last year’s flour. 

Mariana Kukusheva:
Indeed. There has already been an increase in the price of flour. 

Interviewer, Bulgarian National Radio
How can we explain this increase, you say that you still use flour from last year’s crop?

Mariana Kukusheva:
You should ask millers this question, but in general each price is determined by the market. So in this case, there are no worries about speculative increase of prices – I use the term “speculative” because in Bulgaria it has a certain negative connotation. At the moment, no one can predict what the price of bread will be. We must emphasize, however, that in the past 10 years, regardless of how many times the prices of electricity, transport costs, social securities of employees in the sector and interest rates for the credits used in the sector changed, the wholesale price of bread remained relatively stable. It varied between 55 and 65 cents for a 700-gram-bread with included VAT. Afterwards, there are markups. 

Interviewer, Bulgarian National Radio
How about the 13% increase in energy prices as of 1st July?

Mariana Kukusheva:
For the business the increase is 16%. 13% is the increase for household consumers. 

Interviewer, Bulgarian National Radio
The increase will be inevitably calculated in the price of bread, right?

Mariana Kukusheva:
All the expenses are calculated in the price of each commodity, especially in the price of bread. We have said on several occasions that it is high time to introduce differentiated VAT rates on essential commodities, so that each Bulgarian consumer can afford bread. 

Interviewer, Bulgarian National Radio
This is your appeal?

Mariana Kukusheva:
Yes. It is possible and high time for this to happen. 

Interviewer, Bulgarian National Radio
Finally, to sum up Mrs. Kukusheva – you are saying that despite the high price of wheat on the exchange, at the moment you are using last year’s wheat and there is no reason for the price of bread to grow.

Mariana Kukusheva:
We use flour, not wheat, and everyone knows that the crop (or the grain from the field) does not enter and is not directly processed in the mills.  

Interviewer, Bulgarian National Radio
Thank you for your participation!

11.07.2012

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