Bulgarian hospitality sector disputes rising restaurant prices

A dispute has emerged between the Bulgarian hospitality sector and government officials regarding rising restaurant prices and Value Added Tax (VAT) rates. The tension follows comments by Deputy Prime Minister Atanas Pekanov, who suggested that Bulgarian restaurant prices are becoming comparable to those in cities like Vienna and Rome, despite a lower standard of living in Bulgaria.

Industry representatives, including Veselin Nalbanov of the Bulgarian Hotel and Restaurant Association and Zlatko Zlatanov, have defended the sector. They argue that Bulgaria remains a cheap destination compared to Greece or Italy and that current 20% VAT rates place immense pressure on businesses. They have called for a return to a lower VAT rate, noting that 24 other EU countries apply differentiated rates between 3% and 10%. Industry members emphasized that meal prices must cover high overheads, including labor, utilities, and taxes.

Conversely, economist Stoyan Panchev cited National Statistical Institute data, stating that food service prices have increased by approximately 90% since the start of the pandemic, significantly outpacing the cumulative inflation rate of 45%. Panchev also noted that the sector faces challenges regarding low wages and the use of foreign labor, which he suggests may impact the local labor market.