The Hungarian regulation, which obliges the trader to sell certain agricultural products at a specific price and in a pre-determined quantity, is contrary to EU law, reads the judgment published on Thursday by the Court of the European Union.

It was announced: in February 2022, in connection with the coronavirus epidemic, Hungary regulated the distribution of six basic products - sugar, wheat flour, sunflower oil, pork and poultry meat - and certain types of milk. In November 2022, due to the war in Ukraine, the government decree was amended and two additional products, eggs and potatoes, were added to the list. The government decree was in force until July 31, 2023. The decree also stated that the traders who distributed these products were obliged to sell them in pre-determined quantities at the official price, under the burden of a fine.

The Szeged court then turned to the EU court for the interpretation of the legislation.

In its ruling on Thursday, the EU court found that the government decree violates free competition, which is a fundamental component of the EU regulation related to the joint organization of agricultural markets (KPSZ).

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" The obligation to sell certain agricultural products at official prices and in specified quantities prevents traders from freely determining their selling prices and the quantities they wish to sell based on economic considerations, " reads the judgment.

The court believes that the measures contained in the decree are " not proportionate ", despite the arguments that they were introduced to fight inflation and protect disadvantaged consumers.

" The damage to traders' access to the free market under effective competitive conditions, as well as the disturbances caused by the official prices and the quantities imposed on these traders in the supply chain as a whole, exceed the extent necessary to achieve the goals set by the government decree ," the Luxembourg-based EU court stated.

MTI

Cover photo: MTI/Zoltán Balogh