European Commission Opens Infringement Proceedings Against Hungary Over Price Margin Caps

The European Commission has initiated infringement procedures against Hungary over mandatory price margin restrictions that disproportionately affect foreign-owned food retailers and non-food drugstore chains. These measures include a 10% cap on markups for key food products and a 15% cap on household items, which foreign companies claim force them to sell at a loss, violating the EU principle of equal treatment and freedom of establishment under Article 49 TFEU. The Commission’s concern centers on the discriminatory application of these caps, which disadvantage foreign businesses compared to Hungarian-owned companies, and the related retail tax that targets foreign retail chains. Hungary has been given two months to respond or face further legal steps, but the Hungarian government defends the caps, framing them as protecting local businesses and citizens from multinational corporations’ profits and increased prices. The dispute highlights tensions between EU market rules and Hungary’s domestic policies aimed at controlling inflation and supporting local interests. Additionally, a related issue involves Hungary’s lack of transparency in awarding a long-term mining contract, which the Commission also views as violating EU law.