Hungary is being referred to the Court of Justice of the European Union over national rules that cap retailers’ price margins on certain food products and drugstore items.
Hungary imposed price margin restrictions that “mainly affect non-Hungarian undertakings”, and set the permitted gap between purchase and sales prices so low that retailers may be forced to sell at a loss, the European Commission noted in a statement on Wednesday.
New rules introduced in 2025 limited price margins to 10% for certain food products under Government Decree 42/2025 and to 15% for certain drugstore articles under Government Decree 93/2025.
Retailers were also required to maintain sales volumes of the affected products at the levels recorded before the restrictions came into force.
The Commission said retail trade costs include staff expenses and transport, storage and facilities, and put the average price margin at about 30% for food retail and 35% for drugstore retail, while profit margins are “much lower”, at around 3% to 4%.
Dispute over EU internal market rules
The measures were initially introduced temporarily but extended several times before being made permanent in May 2026 by transferring them into Act CLXIV of 2005 on commerce, the Commission said.
Hungary “wrongly claims” the difference between the sourcing price and the sales price equals profit, without accounting for additional costs such as personnel, real estate and taxes.
The Commission declared that the measures could breach the EU Services Directive — an EU law intended to prevent discriminatory barriers in the single market — and Article 49 of the Treaty on the Functioning of the European Union, which covers freedom of establishment for EU nationals.
The case is being pursued in two separate infringement proceedings — one focused on food retailers and one on drugstores.
The Commission pointed out that it first sent Hungary letters of formal notice in June 2025, followed by reasoned opinions in December 2025, before deciding to refer the cases to the EU’s top court.
