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Hungary
Protection of Consumers against Price Increases Violates EU Law
A Hungarian legislation that obliges traders to sell certain agricultural products at a fixed price and in predetermined quantities is contrary to EU law, according to a judgment of the Court of Justice of the European Union published on Thursday. Re
A Hungarian legislation that obliges traders to sell certain agricultural products at a fixed price and in predetermined quantities is contrary to EU law, according to a judgment of the Court of Justice of the European Union published on Thursday. Responding to the judgement, the Hungarian minister for economy said that the court had sided with “profit-hunting multinational companies” instead of families.
As the court recalled, in February 2022, in the context of the coronavirus pandemic, Hungary issued a government decree regulating the marketing of six basic products (certain types of sugar, wheat flour, sunflower oil, pork, poultry meat and milk). In November 2022, the government decree was amended due to the war in Ukraine, and two additional products, eggs and potatoes, were added to the list. The regulation was in force until July 31, 2023. The decree also stated that traders who had already marketed those products at a specified earlier date were obliged to sell them at the regulated price in predetermined quantities, subject to a fine.
SPAR Hungary challenged the legality of the fine imposed by the authorities in the Szeged High Court for failing to stock some of the goods in question in a rural shop. The Szeged court then referred the case to the EU Court of Justice for interpretation of the legislation.
In its judgment published on Thursday, the EU court ruled that the government decree infringed free competition, a fundamental component of the EU’s CMO (‘common market organization’) Regulation.
“The obligation to offer for sale agricultural products at regulated prices and in specific quantities prevents traders from freely setting their selling prices and the quantities they wish to sell on the basis of economic considerations,” the judgment reads.
The court considers that the measures in the regulation are “not proportionate,” despite the arguments that they were introduced to combat inflation and protect disadvantaged consumers. “The undermining of free access by traders to the market in conditions of effective competition and the disturbance of the entire supply chain caused by the regulated prices and quantities imposed on those traders go beyond what is necessary to attain the objectives pursued by the decree,” the court concluded.
Commenting on the judgement, Minister for National Economy Márton Nagy said,
This behavior, on the part of SPAR, the Brussels commission and the parties who have intervened in the case, is contrary to the interests of Hungarian consumers and Hungarian families.”
The minister added that the attacks by SPAR in various lawsuits are still not based on the measures concerned, but on the real reason for the retailer’s dire economic situation: “SPAR Magyarország Kft. is inefficient because it has a higher cost structure than its competitors in the market and it is also underperforming in terms of market and price competition. Instead of taking steps to strengthen its efficiency and competitiveness, it is trying to use the courts to recover its unfair profits.”
Via MTI, Featured image: Hungary Today
The post Protection of Consumers against Price Increases Violates EU Law appeared first on Hungary Today.
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