The European Commission has formally instructed Hungary to remove a limit on retail price margins for food products and drugstore articles that specifically affects non-Hungarian retailers, warning that failure to comply could trigger legal action. (Reuters)
Hungary’s Economy Ministry responded by stating that it intends to maintain the restrictions and is prepared to challenge the European Commission on the matter. The government introduced the margin caps in March 2025 amid the European Union’s highest inflation surge since Russia’s 2022 invasion of Ukraine. Initially covering 30 staple food products with a 10% margin limit, the measure has since been repeatedly extended and expanded, currently applying until February 28, 2026.
The retail margin cap has drawn criticism from foreign retailers, who argued that the measure disproportionately targets their operations while only affecting some Hungarian retailers. Several companies urged the Commission to intervene, highlighting the discriminatory nature of the policy.
On Thursday, the European Commission confirmed that it had sent Hungary a “reasoned opinion,” a formal request under EU law to comply with Single Market rules, giving the country two months to respond and adjust the measure or face potential legal proceedings.
Austrian retailer SPAR Group welcomed the Commission’s intervention. Hans K. Reisch, CEO of SPAR Austria Group, described the reasoned opinion as “a milestone in tackling unlawful retail restrictions,” adding: “The Commission should use all available means to protect European businesses and consumers within the framework of the EU Single Market.”
This development underscores the European Commission’s ongoing vigilance against state measures that may distort competition or discriminate against companies based on nationality, reinforcing the importance of ensuring a level playing field across the EU retail sector.