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EC steps up infringement procedure over Hungary legislation on unprofitable supermarkets

The European Commission yesterday stepped up an infringement procedure launched against Hungary in February 2016 over restrictions against unprofitable supermarkets, Hungarian news agency MTI reported.

The Commission said it had decided to send a reasoned opinion to Hungary requesting it to remove restrictions on loss-making enterprises in the retail sector. Hungarian legislation prohibits retailers selling fast-moving consumer goods (FMCG) to continue operations in Hungary if they operate at a loss for two consecutive years. The Commission considers that such a measure runs counter to the freedom of establishment and the principle of non-discrimination and the free movement of capital and cannot be justified by the overriding reasons of general interest. 

Hungary now has two months to inform the Commission of measures taken to remedy the situation. Otherwise, the Commission may decide to refer the case to the Court of Justice of the EU.