Details of the retail store margin freeze revealed
The regulation also covers retail shops, supermarkets and online retailers, but only for those whose main activity is the retail sale of foodstuffs and whose net turnover exceeds HUF 1 billion in 2023.
The key point is that
"the margin rate applied by the retailer shall not (a) exceed the average margin rate applied in the month of January 2025 and (b) exceed 10%."
If a product was not sold in a particular shop or online platform in January 2025, the margin will follow the average margin of the last month, up to a maximum of 10%.
The share of own-brand products must not exceed the total volume sold in January and February 2025. If a trader has not marketed the product in January and February 2025, the last monthly proportion shall be taken into account.
The regulation also lists the products concerned:
- chicken breast
- chicken leg
- chicken rump
- chicken wing
- whole chicken
- turkey breast
- pork leg
- pork loin
- pork ribs
- pork collar
- pork fat
- cold cuts
- UHT cow milk 1.5% fat content
- UHT cow milk 2.8% fat content
- ESL cow milk 1.5% fat content
- ESL cow milk 2.8% fat content
- Butter
- Sour cream
- yoghurt
- fruit yoghurt
- trappist cheese
- cow's milk cottage cheese
- margarine
- sunflower seed oil and rapeseed oil
- fine wheat flour BL 55
- hard wheat flour BFF 55
- granulated sugar (white sugar)
- garlic
- edible potatoes, except new potatoes
- Fresh eggs, in shell, of fowls of the species Gallus domesticus (excl. eggs for hatching, fertilised)
For meat, this includes fresh, chilled, frozen, on the bone, with skin on, filleted, cut, sliced or minced, unwrapped and wrapped.
For all the products concerned, the margin freeze is also in place for the lactose-free versions.
The regulation requires that the above products be made available on a continuous basis at the level of the average daily volume sold in the year 2024. Traders who start selling these products after the regulation enters into force may use data from another of their stores to determine the margin and proration. The chosen store must be notified to the National Trade and Consumer Protection Authority at least three days before the start of sales.
Fines and penalties
The consumer protection authority checks compliance with the rules ex officio and can impose various fines in the event of infringements.
In the event of a margin violation, a fine of HUF 5 million per product category will be imposed.
If the proportion of own-brand products exceeds the prescribed limit, the level of the fine is as follows:
- HUF 500,000 for an overrun of up to 10 percentage points,
- HUF 1 million for an overrun of between 10 and 50 percentage points,
- HUF 2 million for an overrun of more than 50 percentage points.
In case of stock shortage, the amount of the fine is as follows:
- HUF 500,000 for a shortage not exceeding 10%
- HUF 1 million for a shortage between 10% and 50%
- HUF 2 million if the shortage exceeds 50%, or if the service to customers is not guaranteed.
In case of a serious infringement, the business or online platform may be suspended for a minimum of one day and a maximum of six months. In cases of special appreciation, the authority may also apply a warning.
The trader is exempted from the fine if they prove that the infringement was committed for reasons outside their control.
In the case of a repeated infringement, the fine is doubled and may be imposed several times a day.
If the trader does not comply with the information obligation, they will receive a fine of HUF 1 million.
The regulation will be in force from 17 March to 31 May.
Inflation has gone through the roof
Viktor Orbán announced in a Facebook video on Tuesday that retail shop margins would be restricted. The decision comes as the government has "not received a reassuring answer on how big chains are reducing food inflation, which reached 7.1% in February." See details here:
Cover photo (for illustration purposes only): Getty Images
