The European Commission is suing Hungary for price caps that would force retailers to sell at a loss.

The European Commission has decided to take Hungary to the Court of Justice of the European Union for rules that limit profit margins on food products and drugstore items. Brussels states that the caps of 10% for certain foods and 15% for certain drugstore products mainly affect companies outside Hungary, do not allow retailers to cover their costs, and may violate the freedom of establishment and the Services Directive.

The European Commission has decided to take Hungary to the Court of Justice of the European Union for restrictions on profit margins for the sale of certain food products and drugstore items. Brussels argues that the Hungarian rules mainly affect companies outside Hungary and can force retailers to sell products at a loss.

In short

The European Commission is suing Hungary at the EU Court of Justice.

The case concerns profit margin caps of 10% for certain foods and 15% for certain drugstore items.

The Commission states that the imposed margins are too low for retailers to cover their actual costs.

Brussels believes that the measures may discriminate against companies outside Hungary and may violate the freedom of establishment.

The procedure concerns two cases: food products and non-food products sold in drugstores.

Hungary introduced national rules in 2025 that limit the difference between the purchase price and the selling price for certain products. For some foods, the maximum margin was set at 10%, and for certain drugstore items at 15%. The European Commission states that these limits are well below the actual costs of retail trade.

The issue is not just the purchase price of the product. Retailers pay salaries, transportation, storage, rent, store maintenance, utilities, taxes, and other operating costs. The Commission shows that the average profit margin is about 30% in food retail and 35% in drugstore retail, while the actual profit is much lower, around 3-4%.

Brussels argues that Hungary confuses the difference between the supply price and the selling price with the companies' profit. In reality, this difference must cover operating costs. If the maximum margin is too low, retailers may end up selling at a loss.

The rules not only impose margin caps. Retailers must also maintain the quantities of products sold before the introduction of the capping. The Commission believes that this combination creates losses for existing operators and removes incentives for new companies that might enter the Hungarian market.

The measures were initially introduced as temporary rules, but the Hungarian authorities have extended them several times. In May 2026, they were transferred into permanent legislation by amending the 2005 Trade Law.

The Commission believes that the measures may impose discriminatory and disproportionate requirements, violating the Services Directive and Article 49 of the Treaty on the Functioning of the European Union, which guarantees the freedom of establishment. This freedom allows companies from one member state to establish themselves and conduct business in another member state without unjustified barriers.

For Brussels, the stake is equal access to the market. If a member state imposes rules that disproportionately affect foreign companies or make economic activity unattractive, the internal market can become fragmented. The Commission argues that public authorities must respect equal treatment and not restrict economic activities unless there is a proportionate justification of public interest.

The case has two components. The first concerns restrictions on certain food products sold by food retailers, in case INFR(2025)2052. The second concerns similar restrictions for certain non-food products sold in drugstores, in case INFR(2025)2102.

The Commission sent Hungary letters of formal notice in June 2025 and reasoned opinions in December 2025. Since the European executive considers that Hungary continues to violate EU law, the cases are now reaching the Court of Justice of the European Union.

https://2eu.brussels/ro/news/comisia-europeana-da-ungaria-in-judecata-pentru-plafoane-de-pret-care-ar-forta-retaileri-sa-vanda-in-pierdere