The EC said the measures violated freedom of establishment rules that require authorities to "ensure the equal treatment and non-discrimination of economic operators and to refrain from restricting economic activities unless such restrictions are justified to attain certain public interest considerations".

"Hungary limits the margin between purchase prices and sales prices of certain products to a level that no longer covers the costs of foreign companies beyond their costs for purchasing products, forcing non-Hungarian retailers to sell their products at a loss," the EC explained.

Hungarian authorities have two months to respond to the shortcomings raised in the EC's "letters of formal notice" which indicate the start of an infringement procedure.

Orban: Rate freeze, markups cap must be defended

Hungary is fighting two important battles with Brussels over government measures freezing interest rates for retail borrowers and mandating caps on markups for a range of food and non-food products, Prime Minister Viktor Orban said in a weekly interview with public radio.

Orban said the rate freeze had saved around 300,000 households HUF 55bn, so far. Phasing the measure out would put around one-tenth of those borrowers at risk of bankruptcy, he added.

Orban said the rate freeze was necessary until the cost of borrowing fell with a reduction of the base rate by the National Bank of Hungary (NBH).
 

Without the mandatory caps on markups, he said the prices of most of the affected products would rise significantly. He acknowledged retailers' motivation to boost earnings but said some profit was "unjustified" and, past a certain degree, "could ruin people".
 

Source: MTI – Hungary’s national news agency since 1881. While MTI articles are usually factual, some may contain political bias, and readers should be aware that such content does not reflect the position of XpatLoop, which is neutral and independent.

Since the goal of XpatLoop is to keep readers well briefed, right across the spectrum of opinions, MTI items are shared to ensure readers are aware of all narratives within the local media.

XpatLoop believes in empowering readers to form their own views through complete and comprehensive coverage. To facilitate this XpatLoop has a balanced range of news partners, as you can see when you surf around XpatLoop.com

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