Budapest, February 26 (MTI) – The European Commission (EC) has launched an infringement procedure against Hungary over the law on unprofitable supermarkets as it believes the legislation could restrict the freedom of establishment.

A European Commission spokesman confirmed to MTI on Friday that the EC had sent an official notice to Hungary on Thursday and thereby launched the infringement procedure over the legislation adopted in Hungary in December 2014.

The Hungarian government has two months to respond to the notice.

The law in question prohibits the sale of fast-moving consumer goods (FMCG) by retailers with net revenue of at least 15 billion forints if they book no profits for two years in a row. The regulation will apply to retailers generating at least half of their sales revenue from FMCG sales.

The revenue limit was cut from an original 50 billion forints after the act was sent back to Parliament by President Áder. The final version also brought closer the deadline by which the new rule will apply to January 1, 2017 from 2018, and clarified that it will be based on the results of the 2015 and 2016 business years.


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