Today, the European Commission decided to refer Hungary to the Court of Justice of the European Union (CJEU) for imposing price margin restrictions which mainly affect non-Hungarian undertakings. Hungary limited the margin between purchase prices and sales prices of products to such a low level that it no longer allows companies to cover their costs, forcing retailers to sell their products at a loss.
In 2025, Hungary introduced national rules restricting price margins predominantly for foreign retailers to 10% (Government Decree 42/2025) for certain food products and 15% (Government Decree 93/2025) for certain drugstore articles. These rules also required retailers to maintain the quantities of the concerned products sold prior to the introduction of the price margins. Retail trade incurs many costs beyond the costs of purchasing products, including employee-related expenses and costs of transport, storage and facilities, amounting to an average price margin of 30% for food retail and 35% for drugstore retail, while profit margins are much lower, around 3-4%. The combined effect of fixing maximum price margins and requiring retailers to sell the same quantities of the concerned products creates losses for existing operators already in the market and removes any incentive for new operators willing to start such economic activities to establish themselves in Hungary.
The Hungarian authorities initially introduced the measures on a temporary basis but extended the Decrees several times before transferring the rules into permanent legislation in May 2026 (Act CLXIV of 2005 on commerce). Hungary wrongly claims that the difference between the sourcing price and the sales price equals the profit of the companies concerned, without taking into consideration that they also have substantial additional costs, such as for personnel, real estate and taxes.
The Hungarian measures are liable to impose discriminatory and disproportionate requirements in violation of the Services Directive and to hinder or render less attractive the exercise by EU nationals of the freedom of establishment guaranteed by Article 49 TFEU. The Commission considers that the rules adversely impact economic operators in accessing and exercising activities in this sector, thereby breaching the rules on freedom of establishment as enshrined in the Services Directive and Article 49 TFEU. The Services Directive ( Directive 2006/123/EC ) and the freedom of establishment as enshrined in Article 49 of the Treaty on the Functioning of the European Union (TFEU) require public authorities to ensure the equal treatment and non-discrimination of economic operators and to refrain from restricting economic activities unless such restrictions are justified to attain certain public interest considerations.
One case concerns restrictions regarding the sale of certain food products by food retailers (INFR(2025)2052). The other case covers similar restrictions for the sale of certain non-food products by drugstores (INFR(2025)2102).
The Commission initially sent letters of formal notice in June 2025, followed by reasoned opinions in December 2025. As the Commission considers that Hungary is still in breach of EU rules, it has decided to refer the cases to the CJEU.
