Wedoany.com Report-Dec.12, The European Commission on Thursday issued a formal reasoned opinion to Hungary, demanding the immediate removal of a 10% retail price-margin cap applied to certain food products and drugstore items sold by retailers whose headquarters are outside Hungary. Failure to comply within two months could lead to legal proceedings before the European Court of Justice.

The measure, introduced in March 2023 and repeatedly extended, currently covers 30 essential food categories and various non-food drugstore articles, with the latest extension running until 28 February 2026. Hungary implemented the cap to curb price increases during a period of elevated inflation.

The Commission stated that the restriction discriminates on the basis of nationality and violates the freedom of establishment and the free movement of services within the EU single market, as it primarily affects foreign-owned retail chains while exempting most domestically headquartered companies.

In response, Hungary's Ministry of Economy declared that the government intends to maintain the margin limitation and is prepared to defend the policy in court if necessary.

Several international retailers operating in Hungary have long criticized the rule for placing them at a competitive disadvantage. Austrian-based SPAR Group welcomed the Commission's action.

"The Commission should use all available means to protect European businesses and consumers within the framework of the EU Single Market," said SPAR CEO Austria Group Hans K. Reisch.

The reasoned opinion marks the second stage of an infringement procedure launched earlier by Brussels. Hungary now has until early February 2026 to reply and, if required, adjust its legislation accordingly.