Velchev & Co. Law Firm played an active role in proceedings before the Bulgarian Commission for Protection of Competition (the “CPC”), which resulted in the uncovering of a scheme involving the distribution and sale of a product marketed as butter under the designation “Deutsche Markenbutter”, despite the product not meeting the established standards applicable to butter.

The CPC imposed pecuniary sanctions totaling EUR 309,689 on two Bulgarian companies for infringing Article 31 of the Bulgarian Protection of Competition Act, which prohibits conduct liable to mislead consumers as to the essential characteristics of goods and services offered on the market.

A pecuniary sanction of EUR 186,319.87 was imposed on Klas Food EOOD, while Alpha SD OOD was sanctioned in the amount of EUR 123,369.62.

During the proceedings, initiated upon a complaint filed by Rostar BG OOD, it was established that the two undertakings had marketed and distributed a product bearing the designation “Deutsche Markenbutter” and presented it to consumers as butter. Laboratory analyses, however, demonstrated that the product contained more than 95% non-dairy fats, including palm oil, coconut and palm kernel fats, soybean oil, sunflower oil and lard.

Under the applicable regulatory framework and recognized industry standards, butter is a product manufactured exclusively from milk. Accordingly, describing and marketing a product predominantly composed of vegetable and other non-dairy fats as “butter” creates a misleading impression regarding its composition, quality and essential characteristics and is capable of influencing consumers’ purchasing decisions.

The misleading effect was further exacerbated by the use of the designation “Deutsche Markenbutter”, a well-established German quality standard for cow’s milk butter that is widely recognized by Bulgarian consumers and traditionally associated with stringent requirements regarding the composition, origin and production process of the product.

The CPC concluded that such conduct constituted a misleading commercial practice capable of distorting competition and affecting consumer choice, thereby infringing the principles of fair competition enshrined in Bulgarian competition law.

This case represents another significant example of the effective enforcement of competition rules aimed at safeguarding fair market conduct and protecting consumers from misleading commercial practices in the Bulgarian market.