In an effort to curb surging food prices and protect consumers, the Hungarian government has introduced a retail profit margin cap, effective from Monday. The regulation, announced by Parliamentary State Secretary of the Ministry of Culture and Innovation Róbert Zsigó, limits the retail markup to a maximum of 10 per cent for approximately 1,000 essential food items across 30 categories. Under the new rules, the retail price of these products cannot exceed the purchase price by more than 10 per cent. For items where the profit margin was already below this threshold, prices cannot surpass their January levels.
The regulation was prompted by renewed increases in food prices since January, particularly for basic staples most frequently purchased by households. Zsigó highlighted that retail chains had applied disproportionately high profit margins—129 per cent for sour cream, 70–80 per cent for yoghurts, and 38 per cent for eggs. These increases were deemed excessive and unjustifiable. The government initially requested that retail chains voluntarily reduce prices. However, the proposals received were insufficient and unlikely to result in meaningful price reductions. ‘We will not allow the additional resources provided to families and pensioners—through measures like the expansion of personal income tax exemptions and the 13th-month pension—to be absorbed by retail profits,’ Zsigó affirmed.
The margin cap applies to businesses with an annual turnover of at least one billion forints and will remain in effect until the end of May. However, the government has indicated that the measure may be extended if deemed necessary. Zsigó stressed that companies violating the regulation can expect severe penalties. Additionally, the government is prepared to extend the margin cap to other food products if retailers attempt to compensate for lost profits by increasing prices in other areas. ‘Retailers who fail to comply with the regulations will face strict sanctions. We are committed to protecting Hungarian families and pensioners from unjustified price increases,’ he emphasized.
The Hungarian government’s approach aligns with similar actions taken across Europe. Several countries, including Croatia, Greece, Romania, and North Macedonia, have also implemented measures to address unjustified retail price increases.
During an interview on Kossuth Radio, Zsigó emphasized that Hungary’s measures are part of broader efforts seen across the continent. ‘We stand firmly against excessive and unjustified price hikes. Our goal is to safeguard the interests of Hungarian families and pensioners,’ he declared.
This latest regulatory move forms part of the government’s ongoing strategy to mitigate inflation and ensure economic stability for Hungarian households. It reflects a broader commitment to ensuring that the benefits of government support, such as tax exemptions and pension increases, are not undermined by inflated retail prices.
As the government monitors the impact of this regulation, it remains ready to take further steps to protect consumers and ensure fair pricing across the retail sector.
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