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January 31, 2023

European Commission launches infringement procedures against Romania over retail trade of agricultural, food products

The European Commission on Wednesday launched infringement procedures against Hungary and Romania regarding retail trade of agricultural and food products, according to a press statement released by the European Commission.

The Commission decided on Wednesday to send letters of formal notice to Hungary and Romania on the grounds that their national rules on retail of agricultural and food products run against EU law.

In Romania, large retailers are required to purchase at least 51 percent of food and agricultural products from local producers. This raises concerns with respect to freedom of movement of goods. The same law also requires retailers to promote products of Romanian origin, restricting their commercial decision of which products to place on offer, which in turn runs counter to the freedom of establishment (Article 49 of TEFU Treaty on the Functioning of the European Union, TEFU).

According to EU law restrictions of these freedoms are only permitted when there is a justified need to protect an overriding public interest, such as public health, and no less restrictive the measures can be taken. Neither Hungary nor Romania has provided evidence that their national measures are justified and proportionate. The Hungarian and Romanian authorities now have two months to respond to the arguments put forward by the Commission.

In Hungary, a new law obliges retailers to apply the same profit margins to domestic and imported agricultural and food products, despite the fact that the cost of imported products is subject to currency and exchange rate fluctuations. This may discourage sales of imported agricultural and food products in comparison to domestic ones. The Commission raised concerns on the basis of the principle of free movement of goods (Article 34 of Treaty on the Functioning of the EU, TFEU).

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