Short Rules on Price Reduction Campaign in Bulgaria

1. What kind of price reduction campaigns are provided by law?

The Bulgarian Consumer Protection Act, 2005, as amended (“CPA”) does not differentiate between various price reduction campaigns. There are, however, general regulatory requirements for the scope and content of the price reduction announcement.

2. What are the requirements and minimum content for price reduction announcements?

According to the CPA, any announcement of a discount of prices must indicate:

  • the goods and services or the group of goods and services for which the discount of the prices is valid;
  • the conditions under which the prices are reduced; and
  • the period for which the prices are reduced.

In addition, a price reduction must be announced by one of the following means:

  • by placing the new price beside the prior one, which is crossed out; or
  • by using the words "new price" (нова цена) and "prior price" (предишна цена), followed by the relevant amounts; or
  • by indicating a percentage of the discount, with the new price being placed beside the prior price which is crossed out.

Any announcement of price reduction must state the prior price the trader applied during a specific period before the date on which the price reduction applies. The "prior price" is the lowest price of the good or service that the trader applied during a period of not less than 30 days before the date of the price reduction in the same shop, website or application.

The above rule does not apply in the following cases:

  • for food and other goods that are subject to rapid spoilage;
  • for goods that are liable to deteriorate or expire rapidly, or which are offered on the market for less than 30 days, in which case the period must be not shorter than seven days prior to the date the price reduction is applied.

When the price reduction is progressively increased, the prior price is the price without any price reduction before the first price reduction was applied.

3. Are there any limitations on the period of a price reduction campaign?

An announcement of price discount may not be applied for a period longer than one month or shorter than one working day. 
An announcement of price reduction may nevertheless cover a period longer than one month, but not exceeding six months, in the following cases:

  • full or partial clearance sale of the goods in stock upon sale of the business premises;
  • full or partial clearance sale of the goods in stock on the business premises upon partial suspension of the business activity of the trader, provided that this ground has not been invoked during the preceding three (3) years;
  • remodelling and building works on the business premises for a period exceeding 30 (thirty) working days;
  • transfer of the enterprise or liquidation thereof.

4. What must the displayed price/s include and how must the prior and the new price be indicated?

The product pricing requirements are regulated by the CPA.

Generally, the seller must display in advance the selling price of the products in a clearly visible place and in close proximity to the products. In addition, the law provides that the price could be indicated by means of labels, price lists, signs or any other appropriate means. If the nature of the product allows labelling, the selling price may be indicated on the label.

The selling price and the unit price of products and services must be unambiguous, easily intelligible, clearly and legibly inscribed and not mislead the consumer. The price of the products must be indicated in BGN. The price must be indicated per single unit of quantity.

In general, the prices must include VAT and all other additional taxes and fees, as well as the price of any additional products and services the consumer must pay for, in the cases where the said products and services must mandatorily be sold or provided by the trader. Traders are prohibited from charging consumers fees for the use of a means of payment that exceed the cost incurred by the trader for the use of the same means of payment.

The trader is obliged to issue a document certifying the performed transaction, which must contain, as a minimum, data about the date of the transaction, the type of product or service and the price. 

The prior and the new prices must be indicated by the following means:

  • by placing the new price beside the prior one, which is crossed out; or
  • by using the words "new price" (нова цена) and "prior price" (предишна цена), followed by the relevant amounts; or
  • by indicating a percentage of the discount, with the new price being placed beside the prior price which is crossed out.

In terms of price reduction announcements, please see question 2 above.

5. Are there any competition law aspects of price reduction campaigns?

The Bulgarian Act on Protection of Competition, 2008, as amended ("APC") encompasses various prohibitions on behavior detrimental to the competition between companies. In particular, promotional games, as well as activities consisting in promoting the sale of one or more products by offering another product for free or for a fictitious price, and when the requirements of the APC have not been met, could consititute unfair competition. Further, unfair competition aimed at soliciting customers and resulting in the termination or breach of previously concluded contracts or in the prevention of conclusion thereof with competitors is forbidden. 

Offering of gifts

In particular, unfair soliciting of customers occurs when goods are offered as an add-on to other goods that are being sold for free or for a fictitious price. The aforementioned prohibition does not apply when:

  • advertising materials are being offered, and their value does not exceed 10% (ten per cent.) of the value of the sold goods to which they is added, provided that the advertising company is clearly identified;
  • the offered add-ons are (pursuant to the commercial practice) accessories to the goods being sold or the services being provided;
  • goods or services are discounted when larger quantities are sold.

Promotional games

It is also forbidden to make a transaction when something is offered or promised together with the transaction, and receiving the item depends on solving problems, puzzles, questions, riddles or playing games with cash or object prizes, etc. and where the value of the offered item is considerably higher than the value of the sold goods. The regulator has determined that the value would be "considerably higher" when it is 100 (one hundred) times more than the value of the main sold goods or the difference in their values is more than 15 (fifteen) times the minimum wage in the country.

Selling below cost

Forbidden is the sale for a continuous period of a significant amount of goods, at prices that are lower than the expenses for their production and realization. The Bulgarian Competition Protection Commission would determine the criteria “considerable quantities” and “continuous period of time” on a case-by-case basis.

Misleading advertising

Any advertisement which in any way, including by the manner of its presentation, misleads or may mislead the persons it targets or reaches and thereby possibly influences their economic behaviour, and thereby harms or may harm a competitor, will be considered misleading. In classifying advertisements as misleading, the price or the pricing method and the terms and conditions of the delivery of the goods and services will also be taken into consideration.

6. Are there any fines for infringing pricing rules?

The CPA provides for a pecuniary penalty to any trader who violates the requirements concerning pricing, amounting to BGN 500 (approx. EUR 255) up to, but not exceeding, BGN 5,000 (approx. EUR 2,550).

The sanctions for unfair competition violations under the APC may include a fine in the amount of up to 10% of the aggregate annual turnover of the infringer in Bulgaria in the previous financial year.  

Portrait ofDesislava Anastasova
Desislava Anastasova
Senior Associate
Sofia