Opinion of Advocate General Szpunar delivered on 12 February 2026.#Penny Market Kft. v Komárom-Esztergom Vármegyei Kormányhivatal.#Request for a preliminary ruling from the Győri Törvényszék.#Reference for a preliminary ruling – Freedom of establishment – Freedom to provide services – Common organisation of the markets in agricultural products – Services in the internal market – National legislation imposing an obligation, for a specified period, on retailers of foodstuffs with a turnover in excess of a certain amount, to reduce the prices of certain foodstuffs and to have minimum quantities of those foodstuffs in stock – Measure taken as a result of a situation of emergency – Fines.#Case C-658/24.

1.

Crises, in particular those of a pan-European nature, are not only a regular occurrence at this particular moment in time but, when they are economic in nature, also present the European Union and its Member States with the challenge of shielding the population from excessive financial repercussions. Some Member States, in particular, go to great lengths to offset, for their populations, what they perceive to be market disturbances. However, often it is the measures thereby introduced which give rise to (new) market disturbances given that, in an internal market characterised by the free flow of goods, services and means of production, someone – be it a public or a private entity – will end up footing the bill.

2.

The present request for a preliminary ruling from the Győri Törvényszék (Győr High Court, Hungary) is a good illustration of that phenomenon: with a view to combating inflation and ensuring security of supply of certain food products which it deems absolutely necessary for consumers to have readily available at affordable prices, Hungary has made it compulsory for retailers to offer discounts on those products and to stock a sufficient quantity of them. The measure applies only to retailers with a financial turnover above a certain threshold, with the result that, whilst it ostensibly applies without distinction to both Hungarian retailers and retailers established in other EU Member States, in reality it affects almost solely the latter.

3.

The Court has previously held, in its judgment in SPAR Magyarország, ( 2 ) that legislation similar to that at issue in the present case was precluded by Regulation (EU) No 1308/2013, ( 3 ) a legal instrument adopted under the European Union’s common agricultural policy. In the present Opinion, I shall propose to the Court to rule consistently with that case-law and to hold that the Hungarian measure in question is also precluded by Directive 2006/123/EC. ( 4 )

4.

Under Article 83(5) of Regulation No 1308/2013, ‘Member States may only adopt or maintain additional national provisions on products covered by a Union marketing standard if those provisions comply with Union law, in particular the principle of free movement of goods, and subject to Directive 98/34/EC’. ( 5 )

5.

Under Article 1(1) of Directive 2006/123, ‘this Directive establishes general provisions facilitating the exercise of the freedom of establishment for service providers and the free movement of services, while maintaining a high quality of services.’

6.

Article 3 of that directive, headed ‘Relationship with other provisions of [EU] law’, is worded as follows:

‘1. If the provisions of this Directive conflict with a provision of another [EU] act governing specific aspects of access to or exercise of a service activity in specific sectors or for specific professions, the provision of the other [EU] act shall prevail and shall apply to those specific sectors or professions. …

…’

7.

Article 14 of Directive 2006/123, headed ‘Prohibited requirements’, reads as follows:

‘Member States shall not make access to, or the exercise of, a service activity in their territory subject to compliance with any of the following:

…’

8.

On 24 May 2022, the Hungarian Government declared a state of emergency in view of the war in Ukraine. In the context of that special legal regime, the government passed the a háborús élelmiszerár-infláció csökkentése érdekében szükséges intézkedésekről szóló 162/2023. (V. 5.) Korm. rendelet (Government Decree No 162/2023 of 5 May on measures necessary to reduce food price inflation in a context of war; ‘the Government Decree’), which entered into force on 6 May 2023, in order to address the issue of the high rate of inflation caused by the war.

9.

Paragraph 1(2)(2) of the Government Decree reads as follows:

‘[For the purposes of this decree,] the term “trader” [shall mean] a trader whose principal activity is classified as “4711 – Retail sale in non-specialised stores with food, beverages or tobacco predominating” in the Statistical Classification of Economic Activities and whose net turnover, in accordance with [a kiskereskedelmi adóról szóló 2020. évi XLV. törvény (Law No XLV of 2020 on tax on the retail sector)], exceeded 1000 million forint (HUF) in 2021’.

10.

Paragraph 2(1) to (2a) of that government decree provides:

‘(1)   With regard to products in the categories listed in Annex 1 (“product categories with a mandatory discount”) and the groups of products listed in Annex 2, traders shall, from 1 June 2023 to 30 June 2024, be obliged to apply a price reduction – in all stores (or, in the case of distance selling, on each platform on which that activity is carried on).

(2)   In the case of the product categories listed in Annex 1, for the duration of the price reduction described in subparagraph 1, traders shall – in the promotional period and, from the end of that period, recurrently – in respect of at least one product, to be chosen by the traders in each promotional period from each of the product categories with a mandatory discount (“discounted product”), apply a gross retail sale price lower, by at least 15%, than the lowest gross retail sale price which they have applied in the 30 days prior to the price reduction applied in respect of a given product (“promotional price”).

(2a)   From 1 August 2023 to 30 June 2024, traders shall – in addition to applying promotional prices in accordance with subparagraph 2 – in respect of other products from at least two (to be chosen by the traders) of the groups of products listed in Annex 2 – in the promotional period and, from the end of that period, recurrently – apply a gross retail sale price lower, by at least 15%, than the purchase price.’

11.

Paragraph 3(1) of that government decree provides:

‘Traders shall be obliged

12.

Paragraph 3/A(1) of that government decree further provides:

‘Traders shall be obliged, with regard to those products listed in Annex 2 in which they traded on 1 June 2023,

13.

Paragraph 5(2) of the Government Decree is worded as follows:

‘If, when carrying out its checks, the authority discovers that the obligations laid down in this decree have not been complied with …

…

14.

Annex 1 to the Government Decree lists 20 categories of products with a mandatory discount, which include the following: poultry; pork, beef, other varieties of meat; meat products; milk; dairy products; bread; pastries; dry pasta; flour, sugar; fresh vegetables; fresh fruit; fruit and vegetable juices; ready meals, spices, condiments; coffee, tea; mineral waters and soft drinks.

15.

Annex 2 to the Government Decree contains a list of eight groups of products at a reduced price, which are essentially the same as the products subject to regulated prices that formed the subject matter of the judgment in SPAR Magyarország.

16.

On 20 February 2024, as part of the mandatory promotion scheme, the defendant national authority carried out an on-site check at a shop located in Tatabánya (Hungary) and operated by Penny Market Kft., the applicant in the main proceedings.

17.

By decision of 27 March 2024, the national authority issued Penny Market with a consumer protection fine of HUF 4 million (approximately EUR 10380) on the ground that, during an on-site check, it found that, although in stock, two discounted products (apples and a soft drink in a 0.33-litre container) were not on the shelves in the sales area and that, on the day of the check, no sale of those products had been made. Thus, Penny Market had not ensured the marketing of the products on one day during the week-long promotional campaign and, more specifically, had not offered for sale the average daily quantity marketed in 2022 in order to ensure that customers could be served on a continuous basis. As a result, the applicant had infringed Paragraph 3(1) of the Government Decree.

18.

With regard to the apples, the applicant claims that there were delays on the part of the suppliers and that, on the day of the check, the average quantity of that product sold daily in 2022 was indeed sold. It submits that the defendant should have examined the sales for the entire day and should not have based its conclusions on a particular point in time. It notes that, in the category of mineral waters and soft drinks, there was a replacement product available to consumers.

19.

The referring court harbours doubts as to the compatibility of the Government Decree with both internal market provisions and legislation pertaining to the common agricultural policy.

20.

In those circumstances, by decision of 23 September 2024, received at the Registry of the Court of Justice on 9 October 2024, the Győri Törvényszék (Győr High Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

21.

Written observations were submitted by Penny Market, the Hungarian, German and Austrian Governments and the European Commission. All of those parties, save for the Austrian Government, attended the hearing, which was held on 13 November 2025.

22.

The facts of the present case immediately call to mind those in the judgment in SPAR Magyarország. In that case, the Court held that Regulation No 1308/2013 is to be interpreted as precluding a national measure which, on grounds of emergency, requires a trader to offer for sale certain agricultural products falling within the scope of that regulation, at a regulated price and in an average daily quantity recorded in the trader’s stock, and which provides for the mandatory imposition of a fine in the event of infringement of the obligations laid down by that national measure. ( 6 )

23.

It is noteworthy that the referring court’s questions in the judgment in SPAR Magyarország concerned only provisions of Regulation No 1308/2013, an instrument of the European Union’s common agricultural policy. No reference was made to primary or secondary law under the internal market’s fundamental freedoms. Accordingly, the Court, in its answer, analysed only that regulation. ( 7 )

24.

The present case is different. Here, the referring court refers to a number of internal market provisions in addition to Regulation No 1308/2013. Accordingly, in examining the referring court’s questions, I shall address both sets of provisions.

25.

By its two questions, which ought to be examined together, the referring court seeks, in essence, to ascertain whether Articles 49 and 56 TFEU, Article 16 of Directive 2006/123 or the provisions of Regulation No 1308/2013 preclude national legislation which, invoking a situation of urgency, obliges food retailers with an annual turnover in excess of a certain amount to apply, in respect of certain categories of products, for a specified period of time, a gross retail sale price lower, by at least 15%, than the lowest gross retail price they applied in the preceding 30 days, and which, where that obligation is not complied with, provides that a fine should be levied on a mandatory basis.

26.

The national measure in question can be summarised briefly as follows. Pursuant to the Government Decree, food retailers were required to apply a gross retail price for certain products during a specific period that was at least 15% lower than the lowest gross retail price they applied in the previous 30 days. The Government Decree applies only to retailers whose annual sales revenue in 2021 exceeded HUF 1000 million. That government decree stipulates that, within a specific ‘product category’, the price reduction must be applied to at least one product. The product categories affected include: poultry; pork, beef, other varieties of meat; meat products; milk; dairy products; bread; pastries; dry pasta; flour, sugar; fresh vegetables; fresh fruit; fruit and vegetable juices; ready meals, spices, condiments; coffee, tea; mineral waters and soft drinks.

27.

The judgment in SPAR Magyarország contained a detailed discussion of Regulation No 1308/2013, the salient features of which are briefly recapitulated below.

28.

Hungary had adopted a measure on grounds of emergency which, first, required traders to offer for sale certain agricultural products falling within the scope of Regulation No 1308/2013, at a regulated price and in an average daily quantity recorded in their stock during a reference year and, secondly, provided for the mandatory imposition of a fine in the event of infringement of the obligations laid down by that national measure.

29.

Notably, the Court held the following. First, where there is a regulation on the common market organisation (CMO) in a given sector, the Member States are nevertheless under an obligation to refrain from taking any measures which might undermine or create exceptions to it. Rules which interfere with the proper functioning of a CMO are also incompatible with such common organisation, even if the matter in question has not been exhaustively regulated by it. ( 8 ) Secondly, in the absence of a pricing mechanism, the free formation of selling prices on the basis of fair competition is a component of Regulation No 1308/2013 and constitutes the expression of the principle of free movement of goods in conditions of effective competition. ( 9 ) Thirdly, the establishment of a CMO does not prevent the Member States from applying national rules intended to attain an objective relating to the general interest other than those covered by that CMO, even if those rules are likely to have an effect on the functioning of the common market in the sector concerned, provided that those rules are appropriate for securing attainment of the objective pursued and do not go beyond what is necessary for attaining that objective. ( 10 )

30.

In my understanding, this ultimately amounts to the same type of examination of a national measure as is carried through the lens of the fundamental freedoms under the Treaties: a Member State must advance an objective relating to the general interest and prove that the national measure is suitable and that the means used to attain that objective are proportionate in nature.

31.

In the present case, the obligations to reduce prices and supply quantities provided for in the Government Decree are not provided for in Regulation No 1308/2013. They also contradict the principle of free competition, which is one of the essential objectives of Regulation No 1308/2013. The obligation to market certain products at a lower gross retail price and in a specified quantity prevents traders from freely determining their selling prices or the quantities they wish to sell. Moreover, as correctly pointed out by the German Government, the Government Decree prevents companies from operating in a market-oriented manner, from dynamically responding to supply and demand and from reacting flexibly to changes in the market. Furthermore, numerous factors inherent in free competition, such as seasonal fluctuations, different cost structures, quality differences or, in general, price competition between different players along the supply chain, are ignored.

32.

The Hungarian Government points to combating inflation and ensuring security of supply by way of grounds justifying the Government Decree.

33.

Both of those grounds indeed relate to the general interest. Although they do not constitute grounds that are purely economic in nature, ( 11 ) I would argue that the fight against inflation comes dangerously close to one, which is why utmost caution is warranted in the examination of the Government Decree.

34.

With regard to the suitability of the Government Decree for achieving the stated objectives, it should be noted, concerning the objective of combating inflation, that such a measure is likely to have the opposite effect. As Penny Market has convincingly argued, the obligation on retailers to offer certain products for sale at certain prices, sometimes below purchase prices – and thus at a loss – and to keep them in stock in quantities that are not based on actual demand, means that retailers are sometimes forced to increase the prices of other products in order to offset the losses and additional costs incurred. Such a price increase for non-regulated products could thus negate any price advantages for regulated products and, in turn, could contribute to higher inflation. Furthermore, the mandatory discount campaigns for the product categories listed in Annex 1 to the Government Decree do not appear to be a suitable means of achieving price reductions, as retailers are in effect encouraged initially to increase their prices in order to minimise their losses if they subsequently have to grant the prescribed discounts. Furthermore, the increased demand for price-regulated products is likely to drive up purchase prices in general, which would increase the losses of the retailers concerned and could raise the prices of the products concerned at retailers not covered by the Government Decree, thereby driving up inflation.

35.

Moreover, the fight against inflation is not addressed in a coherent manner. Indeed, as emphasised by the German Government, addressing the issue solely at the level of food retailers is neither coherent nor systematic, as it ignores the other components of the supply chain. If the aim is to combat inflation in a coherent manner through mandatory price reductions, the entire supply chain must be taken into account.

36.

Lastly, by way of further demonstration that the objectives in question are not pursued in a coherent manner, I note that the legislation targets large-scale retailers and fails to take adequate account of the population located in more rural areas, who typically have to travel long distances to a town where a large-scale retailer is located.

37.

Nor is the obligation always to offer certain quantities of certain products suitable for achieving the objectives of combating inflation or ensuring security of supply. By obliging food retailers always to offer for sale the average daily quantity from 2022 of the products affected by the price reduction, seasonal fluctuations in availability and demand for the various products are disregarded. Prescribing a certain quantity, which may often be difficult to maintain in a particular season, is not only artificial but also results in significantly higher costs for retailers, which they must channel towards other products, thereby frustrating the objective of combating inflation. Since the regular mechanism of supply and demand will thus be completely neutralised, the likely result will be artificial price increases for other products.

38.

As demonstrated by the foregoing, the Government Decree is not, in my view, suitable for achieving the objective of combating inflation and ensuring security of supply of certain products. It is therefore precluded by Regulation No 1308/2013.

39.

I shall begin by briefly explaining which provisions of Directive 2006/123 are applicable to the present case and why.

40.

First, Article 2(1) of Directive 2006/123 provides that that directive applies to services supplied by providers established in a Member State. Under Article 4(1) thereof, ‘“service” means any self-employed economic activity, normally provided for remuneration, as referred to in [Article 57 TFEU]’. As the Court has previously held, the activity of retail trade in goods constitutes a ‘service’ for the purposes of that directive. ( 12 )

41.

Secondly, given that the present case does not concern any of the activities or fields excluded from its subject matter ( 13 ) or its scope, ( 14 ) the service in question falls within the scope of Directive 2006/123.

42.

Thirdly, the provisions of Directive 2006/123 are not precluded by other provisions of EU law. Under Article 3(1) thereof, if the provisions of that directive conflict with a provision of another EU act governing specific aspects of access to or exercise of a service activity in specific sectors or for specific professions, the provision of the other EU act is to prevail and apply to those specific sectors or professions. The same provision then goes on to cite, by way of example, ( 15 ) four acts of EU law, among which Regulation No 1308/2013 does not feature. In my view, this is with good reason, as that regulation simply does not govern specific aspects of the access to or exercise of a service activity in specific sectors or for specific professions.

43.

In other words, Regulation No 1308/2013 has a different regulatory and normative content than Directive 2006/123. Neither legal act therefore constitutes a lex specialis in relation to the other.

44.

Fourthly, it is the provisions on freedom of establishment and not those on services which are at issue in the present case.

45.

As is well known, Directive 2006/123 deals with both the freedom of establishment for (service) providers ( 16 ) and the free movement of services. ( 17 ) Although both those chapters are guided by the same principles, there are a number of small but crucial differences in the way they are structured and in the manner in which the EU legislature opted to treat the freedom of establishment of service providers and the free movement of services. Thus, for instance, as regards the freedom of establishment for service providers, a so-called cross-border element is not needed. ( 18 )

46.

The line of demarcation between establishment and services is that of stability. Thus, Article 4(5) of Directive 2006/123 defines ‘establishment’ as ‘the actual pursuit of an economic activity, as referred to in [Article 49 TFEU]’. Distributors falling within the scope of the Government Decree are generally already established in Hungary and typically offer their services and products to Hungarian purchasers. That is certainly the case with Penny Market, in respect of which the referring court noted that it was established by the German REWE Group and has been present in Hungary since 1996. Therefore, as correctly emphasised by the Commission, the retail activity at issue in the present case is an economic activity carried out in a stable and continuous manner in Hungary. The provisions in question thus come under the freedom of establishment enshrined in Chapter III of Directive 2006/123, and not the free movement of services under Chapter IV of that directive. ( 19 )

47.

As a consequence, I shall not address Article 16 of Directive 2006/123, ( 20 ) which is in the chapter on services. Rather, I shall focus on Article 14 of that directive, which relates to the freedom of establishment for service providers.

48.

Article 14 of Directive 2006/123 contains an absolute prohibition on discriminatory requirements.

49.

Under point 1 of that article, Member States may not make access to, or the exercise of, a service activity in their territory subject to compliance with discriminatory requirements based directly or indirectly on nationality or, in the case of companies, the location of their registered office. ( 21 )

50.

Crucially, once such discrimination has been established, there is no possibility whatsoever for a Member State to justify the discriminatory measure. Article 14 of Directive 2006/123 sets out a ‘blacklist’ of requirements which are prohibited under all circumstances. ( 22 ) In that respect, the prohibitions laid down therein go considerably further than the Treaties, under which a restriction on the freedom of establishment can, in theory, be justified if a Member State proves that it is justified by an overriding reason relating to the public interest, and is proportionate and compliant with the European Union’s fundamental rights and general principles.

51.

Against that background, it follows, as regards the present case, that the determination of whether the Government Decree is discriminatory has tangible consequences, since, due to it being contrary to Article 14 of Directive 2006/123, the matter would end there.

52.

While I am aware of the fact that it is ultimately for the referring court to determine whether, in the present case, there is a requirement prohibited under Article 14(1) of Directive 2006/123, I do believe that, based on the information available to it, the Court is in a position to guide the referring court at the present stage. In doing so, I propose that the Court should consider the following.

53.

At the present juncture, it is helpful to recall what the referring court has itself submitted to the Court in its request for a preliminary ruling. The former takes the view that the Government Decree gives rise to indirect discrimination ( 23 ) for the following reasons: (a) the companies involved in the retail sale of food with a turnover of less than HUF 1000 million – that is to say, those traders who were not affected by Paragraph 1(2)(2) of the Government Decree – were all Hungarian-owned, whilst all those traders whose businesses were affected by that provision were not Hungarian-owned; (b) in the actual application of the Government Decree, the competent authorities only check and sanction the stores of traders whose businesses are not Hungarian-owned – stores belonging to traders of Hungarian-owned businesses either are not subjected to such checks or the checks are basically meaningless or are concluded without any sanction being imposed.

54.

I am in no position to question that appraisal of the referring court. Quite the contrary, the factual assessment carried out seems to be completely logical and reasonable, giving me solid grounds to believe that the Government Decree discriminates, in an indirect manner, against companies which are foreign-owned.

55.

Lastly, for the sake of completeness, I do not believe that the Court’s judgments ( 24 ) in the field of taxation have any bearing on the present case. That field is marked by a particular sensitivity and the general fiscal sovereignty of Member States. The entire logic of and rationale behind taxation is underpinned by a presumption of legality in the sense that, thanks to the aforementioned general fiscal sovereignty, Member States are, in principle, free to tax any activity. Member States are also, in principle, free to establish the system of taxation that they deem the most appropriate, in consequence of which the application of progressive taxation falls within the discretion of each Member State, ( 25 ) which is essentially why even steeply progressive tax rates do not inherently amount to discrimination based on where companies have their registered office. ( 26 ) Ergo, in such a situation it may well be the case that a progressive tax has a greater impact on undertakings owned by natural or legal persons of other Member States than on natural or legal persons resident or established in the Member State in question. A different logic applies to legislation such as that at issue in the present case, however. Here, the presumption is the other way round in that it is Member States which must refrain from putting in place any obstacles likely to impede the functioning of the internal market.

56.

The Court accordingly takes a different approach in cases involving taxes under the internal market freedoms, in particular the freedom to provide services, the freedom of establishment and the free movement of capital, ( 27 ) by merely reviewing measures which are discriminatory in nature. Hence, once the Court finds that a measure is not discriminatory, it will not fall within the scope of the respective Treaty freedom. Because of that special set of circumstances, I would advise the Court not to transpose elements of its case-law in the field of taxation into standard cases concerning the internal market such as the present one.

57.

In conclusion, the Government Decree is precluded by Article 14 of Directive 2006/123.

58.

Given my findings above, the analysis which follows is no longer necessary. Should the Court decide not to follow my reasoning on Article 14 of Directive 2006/123 and to proceed with an appraisal of the Government Decree in the light of Article 15 of that directive, I refer then to the analysis above relating to Regulation No 1308/2013. The Government Decree would be precluded by Article 15 of Directive 2006/123 for exactly the same reasons as it would be by Regulation No 1308/2013.

59.

In the light of all the foregoing considerations, I propose that the Court should answer the questions referred by the Győri Törvényszék (Győr High Court, Hungary) as follows:

The provisions of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 and Article 14 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market

must be interpreted as precluding a national measure which, invoking a situation of emergency, obliges food retailers with an annual turnover in excess of a certain amount to apply, in respect of certain categories of products, for a specified period of time, a gross retail sale price lower, by at least 15%, than the lowest gross retail price they applied in the preceding 30 days, and which, where that obligation is not complied with, provides that a fine should be levied on a mandatory basis.