Bulgarian restaurant industry rejects Deputy PM Pekanov’s price reduction calls

Bulgarian restaurant and tourism industry associations have issued a sharp rebuttal to Deputy Prime Minister Atanas Pekanov following his comments regarding rising service prices. Pekanov suggested that restaurant prices in Sofia should be lower, noting that they are currently comparable to prices in Vienna, and stated that the government does not plan to reduce VAT for the sector.

The Association of Establishments in Bulgaria and the Bulgarian Association of Establishments criticized Pekanov’s comparison as “convenient political rhetoric” rather than economic analysis. They argued that a direct comparison between Sofia and Vienna fails to account for critical differences in tax burdens, labor costs, rents, energy prices, and purchasing power. The associations highlighted that the sector is subject to a full 20% VAT, whereas in Austria, food and hospitality often benefit from preferential tax regimes.

Industry representatives emphasized that price increases are driven by rising costs for raw materials, energy, and labor, rather than arbitrary decisions. They called for a more predictable economic environment and a reduction in VAT to maintain the competitiveness of Bulgaria’s tourism sector.