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EC launches procedures against Hungaryʼs supermarket law

The European Commission (EC) launched an infringement procedure against Hungary over a law related to unprofitable supermarkets as the EC believes this legislation could restrict the freedom of establishment, Hungarian news agency MTI reported today.

The commission sent an official notice to the Hungarian government yesterday on a procedure it has launched regarding legislation adopted in Hungary in December 2014, and the Hungarian government has two months to respond to the notice, an EC spokesman told MTI.

The law in question prohibits the sale of fast-moving consumer goods (FMCG) by retailers with net revenue of at least HUF 15 billion if they remain unprofitable for two years in a row, MTI said, adding that the regulation will apply to retailers generating at least half of their sales revenue from FMCG sales.

Officials have said the purpose of the law is to prevent large multinationals from undercutting the prices of their competition for long periods of time.

MTI noted that the revenue cap was lowered from an original HUF 50 bln after the act was sent back to Parliament by Hungary’s President János Áder.