The Court of Justice of the European Union has indicated that maximum limits cannot be set for the selling price and available quantities of food, as this violates free competition.
The ruling refers specifically to Hungarian law that pre-establishes the price and quantities at which certain agricultural products can be offered for sale.
Hungarian law
In 2022, in the context of the pandemic, Viktor Orbán's government regulated the marketing of six basic goods: certain types of sugar, wheat flour, sunflower oil, pork, poultry, and milk. When the war in Ukraine led to escalating inflation, the Hungarian government added potatoes and eggs to that list.
The law required retailers, under penalty of fine, to limit the prices of these products to the value they had in October 2021, established as a reference point for both price and stock quantities, which also could not be different from those that existed at the time.
The law forced supermarkets to sell below cost, leading to supply problems and rationing of the quantities each customer could buy. As a consequence, the prices of foods that acted as substitutes (pork loin or powdered sugar) were inflated by 200%, according to the Hungarian Central Bank.
Research
The investigation by the Court of Justice of the European Union began following an appeal lodged by SPAR Magyarország, which had been fined for failing to respect minimum stock levels, in the General Court of Szeged, Hungary, which, in turn, referred the matter back to the former for it to rule on the compatibility of the decree with the principle of free determination of the selling prices of agricultural products.
The understanding is that it violates free competition and imposes "disproportionate" measures to achieve the objectives of combating inflation and protecting disadvantaged consumers by guaranteeing the supply of basic foodstuffs.
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