The starting point of the proceedings was a fine imposed on SPAR Magyarország for violating the quantity rules.
The Hungarian regulation prevents “traders from freely determining the selling prices and quantities of these products on the basis of economic considerations without adequate justification,” according to a statement from the ECJ. Hungary justified the measure by citing the need to “combat inflation” and “protect disadvantaged consumers.”
However, the ECJ lacks proportionality here: “The impairment of traders’ free access to the market under conditions of effective competition and the disruption of the entire supply chain caused by the prices set and the quantities imposed on traders go beyond what is necessary to achieve the objectives pursued by the government decree.”
Regulation due to Corona
Table of Contents
Table of Contents
In the context of the corona pandemic, the government in Budapest issued a decree in February 2022 that supermarkets must offer various agricultural products (certain types of sugar, wheat flour, sunflower oil, pork and poultry meat, and milk; eggs and potatoes followed later) at a fixed price and in certain quantities. The decree remained in force until the end of July 2023.
In May 2023, SPAR Magyarország was found to have violated the regulation and a fine was imposed, which the Salzburg-based group’s Hungarian subsidiary contested before a Hungarian court. This court then turned to the ECJ to examine its compatibility with Union law. Following today’s response from the ECJ, the case is back before the court in Hungary, which must now decide on the specific case.
ePaper
What are the implications of the ECJ’s ruling on Hungary’s price and quantity controls for the EU single market?
EU Court Rules Against Hungary’s Price and Quantity Controls on Agricultural Products
In a landmark ruling, the European Court of Justice (ECJ) has declared Hungary’s price and quantity controls on certain agricultural products to be incompatible with EU law. The court’s decision comes after a fine was imposed on SPAR Magyarország, a Hungarian subsidiary of the Salzburg-based group SPAR, for violating the quantity rules.
Background of the Case
In February 2022, the Hungarian government issued a decree in response to the COVID-19 pandemic, requiring supermarkets to sell certain agricultural products, such as sugar, wheat flour, sunflower oil, pork and poultry meat, and milk, at a fixed price and in specific quantities. The decree remained in effect until the end of July 2023. However, in May 2023, SPAR Magyarország was found to have breached the regulation, leading to a fine being imposed.
The Hungarian court subsequently referred the case to the ECJ, seeking clarification on whether the decree was compatible with EU law. The ECJ has now ruled that the Hungarian regulation restricts traders’ freedom to determine the selling prices and quantities of these products, without adequate justification.
ECJ’s Ruling
The ECJ has stated that the Hungarian measure lacks proportionality, as it goes beyond what is necessary to achieve the objectives pursued by the government decree. The court argues that the impairment of traders’ free access to the market under conditions of effective competition and the disruption of the entire supply chain caused by the prices set and the quantities imposed on traders are excessive.
The ECJ’s ruling is significant, as it emphasizes the importance of ensuring that national measures do not unduly restrict the free movement of goods within the EU single market. The court’s decision will have implications for Hungary and other EU member states that have implemented similar measures in response to the pandemic.
Hungary Fined for Non-Compliance with EU Asylum Rules
In a separate development, the ECJ has fined Hungary €200 million for breaching EU asylum rules [[1]](1). The court imposed a daily penalty payment of €1 million for each day of delay in complying with the ruling. This decision is a strong signal from the ECJ that EU member states must respect the bloc’s asylum rules and protect the rights of asylum seekers.
In another case, the ECJ has ruled on working time in a Hungarian case, emphasizing the importance of ensuring that workers receive adequate rest periods [[3]](3). The court’s decision highlights the need for EU member states to comply with EU labor laws and protect the well-being of workers.
Conclusion
The ECJ’s rulings in these cases demonstrate the court’s commitment to upholding EU law and ensuring that member states respect the principles of the single market and the protection of fundamental rights. The decisions will have significant implications for Hungary and other EU member states, and serve as a reminder of the importance of complying with EU law.
References:
[1] European Court of Justice fines Hungary €200 million for breaking bloc’s asylum rules. (2024, June 13). Le Monde.
[2] Hungary: ECJ fine for breaching EU asylum rules. (2024, June 16). Migration and Integration.
[3] ECJ decision on working time in Hungarian case. (2023, December 13). Schoenherr.
What are the main reasons the ECJ ruled Hungary’s price and quantity controls incompatible with EU law?
Hungary’s Price and Quantity Controls: A Violation of EU Law
In a recent ruling, the European Court of Justice (ECJ) has declared that Hungary’s price and quantity controls on certain agricultural products, introduced during the COVID-19 pandemic, are incompatible with EU law. This decision has significant implications for the EU single market and the freedom of traders to operate in Hungary.
Regulation due to Corona
In February 2022, the Hungarian government issued a decree requiring supermarkets to offer specific agricultural products, such as sugar, wheat flour, sunflower oil, pork and poultry meat, milk, eggs, and potatoes, at fixed prices and in certain quantities. This decree remained in force until the end of July 2023. The Hungarian government justified the measure as necessary to combat inflation and protect disadvantaged consumers.
ECJ’s Ruling
However, the ECJ has ruled that Hungary’s price and quantity controls go beyond what is necessary to achieve the objectives pursued by the government decree. The court stated that the regulation prevents traders from freely determining the selling prices and quantities of these products on the basis of economic considerations without adequate justification. This impairment of traders’ free access to the market under conditions of effective competition and the disruption of the entire supply chain caused by the prices set and the quantities imposed on traders are not proportionate to the objectives pursued by the government decree [[1]].
Implications for the EU Single Market
The ECJ’s ruling has significant implications for the EU single market. It reaffirms the principle of free movement of goods and services within the EU and highlights the importance of proportionality in government regulations. The ruling also underscores the need for EU member states to ensure that their domestic regulations comply with EU law and do not unduly restrict the freedom of traders to operate in their territories.
Context: Hungary’s Relationship with the EU
This is not the first time that Hungary has been at odds with the EU over its domestic regulations. In recent years, Hungary has faced criticism from the EU over its asylum policies, with the ECJ imposing a fine of €200 million on Hungary for failing to implement a previous court ruling [[3]]. Additionally, the ECJ has ruled that Hungary’s foreign investment screening law is incompatible with EU law[[[2]].
Conclusion
the ECJ’s ruling on Hungary’s price and quantity controls is a significant development in the relationship between Hungary and the EU. It highlights the importance of EU law and the need
