Hungarian Prime Minister Péter Magyar said on Friday that the government should consider phasing out the country’s food retail margin caps, arguing that the measure is increasingly damaging farmers and small shops.
Speaking during a stop in Kisvárda as part of his nationwide tour, Magyar said the measure had originally been introduced by the previous government to slow food price increases, but had produced serious side effects across the agricultural and retail sectors.
According to the prime minister, low procurement prices are putting pressure on Hungarian producers, while large retail chains are increasingly turning to cheaper imported products in order to offset losses created by the margin restrictions.
He claimed that in Szabolcs-Szatmár-Bereg County alone, dozens of small shops had gone out of business as a result of the measure, MTI reported.
Small shops and farmers under pressure
Magyar said the previous government had tried to protect smaller retailers by exempting them from the margin cap, but argued that the policy ultimately strengthened larger chains, which were better able to absorb the losses.
He also criticised the effect of the measure on Hungarian agriculture, saying that artificially low procurement prices had made it harder for domestic producers to remain competitive.
Magyar said the government should now assess the future of the measure together with chambers of commerce, food retailers and other market participants.
His remarks come at a time when inflation in Hungary has fallen sharply compared with the levels seen during the previous government.
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Inflation has fallen sharply in 2026
Annual inflation stood at 1.7 percent in June, according to the Hungarian Central Statistical Office, while food prices were only 0.2 percent higher than a year earlier. Excluding catering services, food prices actually fell by 2.4 percent year on year.
Inflation eased further during the summer. The National Bank of Hungary reported that annual inflation fell to 1.2 percent in July and 1.3 percent in August, while food inflation also declined.
This has also strengthened the debate over whether extraordinary price-control measures are still necessary.
Central bank says removing the cap would not threaten price stability
The Hungarian National Bank has already signalled that the margin caps could be withdrawn without causing a major inflation shock.
In its June assessment, the Monetary Council said that even an immediate removal of the price margin caps would not push inflation above the central bank’s 3 percent target.
The central bank’s June Inflation Report also noted that the large international food retailers it examined were collectively loss-making in 2025, although the scale of losses had decreased compared with the previous year.
At the same time, the MNB has repeatedly stressed that the stronger forint, softer food price dynamics and weaker inflation expectations have all contributed to a more favourable inflation environment this year.
Magyar therefore argued that, with inflation now significantly lower than in previous years and several food prices already falling, the government should seriously consider gradually ending the margin cap regime.
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