Food prices and consumer protection: limits on national intervention in the Penny Market case

by Valeria Paganizza

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Efforts to combat inflation and protect consumers have brought renewed attention to the limits that European Union law places on national interventions in food prices. The Court of Justice addressed this issue in its judgment of 18 June 2026 in Case C-658/24, delivered in preliminary ruling proceedings following a reference from a Hungarian Court.

The emergency measures adopted by the Hungarian Government

Following the outbreak of the Russia–Ukraine conflict, the Hungarian Government adopted emergency measures based on national Law No XCIII of 2021 on the coordination of defence and security activities. That law authorises derogations from statutory provisions and the adoption of certain measures to safeguard life, health, persons, property and citizens’ rights, as well as the stability of the national economy. The scope of those measures must comply with the principle of necessity: this power may be exercised only to the extent necessary to address an event capable to trigger a state of war, a state of emergency or an emergency situation, and in accordance with the principle of proportionality between the measure adopted and the objective pursued. The measures are intended to prevent or respond to the possible adverse effects of such a state or emergency situation.

The measure aopted by the Hungarian Government through Decree 162/2023 introduced a mandatory price reduction scheme designed to protect consumers against excessive inflation. Specifically, food retailers whose annual turn over in 2021 exceeded one billion Hungarian forints (approximately EUR 2,500,000)were required, during a specified “promotional period”, to apply a grossselling price at least 15% lower than the lowest gross selling price they had charged in the preceding 30 days to at least one product of their choice from among the categories specified in Annex I to the Decree (par. 2.2 Hungarian Decree). The Decree also required operators to place that product on the market in quantities corresponding to the average daily quantity sold in 2022 (par.3.1 b) Decree), in order to ensure that consumer demand was consistently met (paragraph 21 of the judgment).

Failure to comply with the obligations imposed by the Decree could result in a penalty imposed by the national authority, including the possible suspension of activities at the outlet concerned (Article 5.2, e) of the Decree and paragraph22 of the Judgnment).

The facts

In February 2024, the national authority inspected an outlet belonging to the Penny Market chain. It found that some of the products covered by the promotional period, specifically apples and beverages falling within the category of mineral waters and soft drinks, were not on the shelves and that, on the day of the inspection, the outlet had not sold any of those products. The authority therefore considered that the operator had failed to fulfil its obligation to ensure that the average daily quantity was placed on the market, since the food products, although held in storage, had not been put on the shelves. Consequently, by a decision of 27 March 2024, it imposed a fine of HUF4,000,000 (approximately EUR 10,000) on the operator.

The challenge and the reference for a preliminary ruling

The operator challenged the decision, arguing, first, that it had notified the Ministry ofthe delay in the delivery of the apples and, second, that the quantity sold over the course of the entire day met the statutory requirements.

Taking into account the fact that Penny Market belongs to a German group and that its capital is not held by Hungarian persons, the national court referred the following questions to the Court of Justice: “(1) Must Articles 49 and 56TFEU, together with Article 16(1) of [Directive 2006/123], be interpreted as permitting national legislation which, invoking a situation of emergency, obliges… retailers in the food sector with an annual turnover in excess of HUF 1000million [(approximately EUR 2500 000)] to apply, in respect of certain categories of products, for a specified period of time, a gross retail sale price lower, by at least 15%, than the lowest gross retail sale price they have applied in the preceding [30] days and which, where that obligation is not complied with, provides that a fine should be levied on a mandatory basis?

(2) Must[Regulation No 1308/2013] be interpreted as permitting national legislation which, invoking a situation of emergency, obliges exclusively retailers in the food sector with an annual turnover in excess of HUF 1 000 million [(approximately EUR 2500000)] to apply, in respect of certain categories of products, for a specified period of time, a gross retail sale price lower, byat least 15%, than the lowest gross retail sale price they have applied in the preceding [30] days and which, where that obligation is not complied with, provides that a fine should be levied on a mandatory basis?” (paragraph 28 of the judgment).

The Court’s reasoning

The Court of Justice begins its examination with the second question, considering the opportunities that Regulation (EU) No 1308/2013 on the common organisation of agricultural markets leaves to Member States to adopt national measures. Agriculture falls within the competence shared between the European Union and the Member States. This means that the latter may exercise their competence to the extent that the Union has not exercised its own. The existence of a regulation laying down common rules on the marketing of agricultural products prevents Member States from adopting measures that might derogate from or infringe those rules, orotherwise impede their proper functioning (paragraph 31). Nevertheless, Member States may adopt rules pursuing objectives in the general interest, provided that those rules are suitable for attaining the objective and do not go beyond what is necessary (paragraph 33).

The Court assesses the measure adopted by the Hungarian Government through Decree162/2023 against these criteria. It concludes, on the one hand, that imposing a maximum price and a minimum quantity for sale affects operators’ decision-making and, consequently, competition. On the other hand, the Court acknowledges that a Member State may adopt measures intended to combat or limit inflation or to protect disadvantaged consumers, provided that those measuresmeet the requirements of suitability and proportionality. The assessment of suitability must, in particular, establish whether the measure can achieve the objective pursued in a consistent and systematic manner (paragraph 40). In the case of the measure adopted by the Hungarian Government, the Court does notconsider its application to be systematic, since the obligation applies only tofood retailers with an annual turnover exceeding one billion Hungarian forints,which are often located in urban areas. Consequently, first, the large numberof operators with a lower turnover remain exempt from the measure; second, asignificant proportion of disadvantaged consumers in rural areas will be unableto access the purported benefit. For the same reasons, the Court also considersthe obligation to maintain minimum stocks of products unsuitable.

As regards thefirst question, the Court deems it appropriate to reformulate it, taking theview «by its first question, the referring court asks, in essence, whetherArticle 14(1) and Article 15 of Directive 2006/123 must be interpreted asprecluding legislation of a Member State which, having regard to a situation ofemergency, obliges traders engaged in the activity of retailing foodstuffs withan annual turnover in excess of EUR 2 500 000, on pain of afine, first, to apply, in respect of certain categories of products, for aspecified period of time, a gross retail sale price lower, by at least 15%,than the lowest gross retail sale price they have applied in the preceding30 days and, second, to always have minimum quantities of certain productsin stock during that period» (paragraph 52).

Article 14 ofDirective 2006/123/EC prohibits discriminatory requirements governing accessto, or the exercise of, a service activity, such as requirements based directlyor indirectly on nationality or the location of a company’s registered office.Although it cannot rule on the national dispute itself, the Court provides thereferring court with guidance on how to resolve it. While the applicablelegislation does not permit restrictions based on the location of theregistered office, the Court considers that a measure is not necessarilydiscriminatory solely because all operators whose turnover exceeds thethreshold set by that measure are non-Hungarian. Nevertheless, the Court notesthat, as the Commission observed, this situation results from Hungarianlarge-scale retailers circumventing the measure by conducting their retailactivities through franchised outlets whose turnover cannot be aggregated.Furthermore, two of the main Hungarian retail chains reportedly operate underactivity codes other than those to which the 2023 Decree applies (paragraph61).

The Courttherefore indicates to the referring court that, if the Commission’s assertionsare confirmed, the measure adopted by the Hungarian Government should beregarded as discriminatory (paragraph 63).

In conclusion, the Court interprets Regulation (EU) No 1308/2013 as «as precludinglegislation of a Member State which, having regard to a situation of emergency, obliges traders engaged in the activity of retailing foodstuffs with an annual turnover in excess of EUR 2 500 000, on pain of a fine, first, to apply, in respect of certain categories of products falling within the scope of that regulation, for a specified period of time, a gross retail sale price lower, byat least 15%, than the lowest gross retail sale price they have applied in the preceding 30 days and, second, to always have minimum quantities of certain products in stock during that period». It interprets Article 14(1)and Article 15 of Directive 2006/123/EC as «as precluding legislation of a Member State which, having regard to a situation of emergency, obliges traders engaged in the activity of retailing foodstuffs with an annual turnover inexcess of EUR 2 500 000, on pain of a fine, first, to apply, in respect ofcertain categories of products, for a specified period of time, a gross retailsale price lower, by at least 15%, than the lowest gross retail sale price they have applied in the preceding 30 days and, second, to always have minimumquantities of certain products in stock during that period».

A few remarks

The judgment addresses three closely connected issues: the opportunities for national intervention within the common organisation of agricultural markets; the suitability of price containment measures for achieving their stated objectives; and compliance with the prohibition of discrimination when identifying the operators subject to the obligations. The common thread is thelimits that EU law places on Member States’ choices, even where those choices respond to an emergency and seek to protect consumers.

This last objective deserves particular attention. Imposing lower prices does not, in itself, ensure effective protection for the most economically vulnerable consumers: they must be able to access the products covered by the measures in practice. The selection of the operators subject to the obligations therefore matters both for the equal treatment of businesses and for the suitability of the intervention. The judgment thus highlights the need for consistency between the stated objectives, the scope of the measures and their practical ability to reach those they are intended to protect.

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