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Romanian & Hungarian local food laws breach EU single market : Commission

Niamh Michail

By Niamh Michail+

17-Feb-2017
Last updated on 17-Feb-2017 at 14:09 GMT2017-02-17T14:09:35Z

The protectionist laws are in breach of the EU's single market rules. © iStock/MarianVejcik
The protectionist laws are in breach of the EU's single market rules. © iStock/MarianVejcik

Romania and Hungary's laws on promoting domestic food over imports are in breach of EU law, according to the Commission which has launched infringement proceedings against both countries.

According to the Romanian law , 51% of fruit, vegetables, meat, eggs, honey, dairy and bakery products have to be sourced from short supply chains (meaning regional or national suppliers). This applies to retailers with a turnover of more than two million euros.

It also requires retailers to promote products of Romanian origin and restricts their freedom to decide which products to place on offer.

The Hungarian law obliges retailers to apply the same profit margins to domestic and imported agricultural and food products, despite the fact that the cost of imported products is subject to currency and exchange rate fluctuations, which may discourage sales of imported agricultural and food products in comparison to domestic ones.

Both laws contravene Article 34 of the Treaty of the Functioning of the European Union which protects the free movement of goods within the bloc and prohibits national laws that make it easier to sell domestic goods over imported ones.

According to a statement issued by the Commission, neither Hungary nor Romania has provided evidence that their national measures are justified and proportionate. “The Hungarian and Romanian authorities now have two months to respond to the arguments put forward by the Commission,” it said.

A Commission spokesperson would not confirm details of these arguments as in infringement procedure correspondence is confidential.

But the Romanian food industry is trying to find a way that will allow it to keep some form of the law.

Mihai Visan, executive director of national food industry group Romalimenta, told us: "We have been invited along with other professional organisations from agrifood sector and retailers to discuss the necessary amendments to the law, in order to make it entirely compatible with EU regulations and we hope to find rapidly the best solutions to achieve that goal."

Visan sees the laws as part of the same movement of origin labelling that is happening across the bloc.

"Romania is not the first member state trying to help its farmers or local producers bypassing the internal market rules, because the mandatory origin labeling of milk and/or meat per se, or as ingredients, goes in the same direction," he said.

France, Italy, Portugal, Greece, Finland and Lithuania are trialling some form of mandatory origin labelling .

Slow steps

There are several stages to infringement proceedings. First the Commission sends a letter of formal notice requesting further information to the country concerned, which must send a detailed reply within a specified period – usually 2 months.

© iStock/pixinoo

Is the EC decides the country is in breach of EU law it will send a formal request to comply. If this does not happen within a specified time period (usually two months), the Commission could refer the matter to the Court of Justice, although most cases are resolved before this stage.

However, according to Lara Skoblikov, food law expert and partner at Food Compliance International, said that even before going to court the preliminary phase can sometimes takes years.

In 2015 the Commission formally asked Slovakia to amend a law requiring supermarkets with a large turnover to publicly inform shoppers at the entrance of each store how many food products are made in Slovakia.

[This may] lead to consumers' prejudice against products produced outside of Slovakia and encourage retailers to sell domestic products,” it ruled, prompting Slovakian lawmakers to pledge its repeal within two years (by January 2017).

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