Retailers Warn Food Voucher Limit Hike Will Drive Up Prices

Under the proposed state budget changes, the annual quota for food vouchers is set to jump from 818 million to 1.5 billion euros. The monthly cap available to an individual worker will increase from €102 to €200, though a new 7% tax reduces the maximum net payout to €186 per month. Nikolay Valkanov, executive director of the Modern Trade Association, criticized the package in a televised interview with Nova TV, stating that the reforms contain fundamental arogisms that directly impact consumers.

Supermarkets Warn Higher Voucher Limits Will Trigger Price Hikes

Grocery retailers argue that processing food vouchers creates significantly higher overhead costs than cash or standard bank card transactions. According to Valkanov, stores must pay three distinct types of fees to financial intermediaries when customers use food vouchers, making them the most expensive payment method for retail food stores.

“Increasing the value of food vouchers will lead directly to higher prices in stores,” Valkanov told Nova TV, pointing to the processing costs charged by banks and voucher operators. He contended that the government’s dual approach—expanding the voucher scheme while introducing a proposed excess profit tax on large retail chains—fails to account for real market dynamics in retail.

Retailers Challenge Excess Profit Tax Proposals

The Modern Trade Association executive also addressed government discussions around an excess profit tax targeting large retail chains. Valkanov argued that retail profit margins are measured as a percentage of revenue and are actually declining rather than growing.

The state evaluates absolute financial values without accounting for network expansion or job creation by growing store chains, according to Valkanov. He added that any revenue collected from an excess profit tax on large retailers would be negligible compared to the broader deficit in the state budget.

Voucher Operators Face Scrutiny Over Expanded Business

Instead of taxing food retailers on slim operational margins, Valkanov suggested that financial authorities examine the profit models of the private operators who issue the food vouchers. Because the government policy doubles the scale of the voucher market, these private intermediaries stand to capture substantial business growth.

“When the state hands you a business, as in the case of food vouchers, and now doubles it, that is the example of excess profit: money falling from above,” Valkanov said. He contrasted this position with retail grocery stores, which buy and sell food products with minimal margins and receive no comparable state-backed windfalls.

Summary of Proposed Food Voucher Changes

• Timeline: Proposed implementation scheduled for 2027 by the Bulgarian government.
• Annual Quota: Planned increase from 818 million to 1.5 billion euros.
• Monthly Worker Cap: Proposed rise from €102 to €200, subject to a new 7% tax yielding a net maximum of €186.
• Industry Opposition: The Modern Trade Association warns of retail price increases due to high bank and processing fees.