Price Caps: Gov't Loses Case Against Spar Supermarket in Hungary
- 13 Sep 2024 8:01 AM
The Court of Justice of the European Union (CJEU) said that price caps Hungary's government earlier mandated for staples such as sugar, flour, cooking oil, pork and milk, to keep inflation down were contrary to EU law in a ruling.
The price caps were rolled out in February 2022, in the context of the pandemic, and expanded in November 2022, as the result of the war in Ukraine. The decree also required supermarkets to maintain adequate stocks of the affected products.
Supermarket chain Spar Magyarorszag was fined in May 2023 for failing to comply with the stocking rules and appealed the penalty at a local court. That court, in Szeged (SE Hungary), sought a preliminary ruling from the CJEU in light of doubts concerning the compatibility of the rules with the principle of freely setting prices and fair competition.
In its ruling, the CJEU said the government decree on the price caps and inventory levels "undermined fair competition". The court acknowledged that the government decree was appropriate for combating inflation, but said the measures were "not proportionate".
"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 said.
MTI Stock Photo - for illustrative purposes only
Source:
MTI - The Hungarian News Agency, founded in 1881.
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