Caps and ceilings: Fighting inflation with price regulation in several countries in the region
Administrative interventions are being used to curb price increases in numerous countries across the region. Hungary has taken the most extensive and market‑interfering measures.
Extensive price margins in Hungary
In 2025, Hungary introduced a relatively unique and broad market intervention in the pricing of food and household goods: the government set a profit margin cap (margin freeze) for retailers, limiting store margins on basic products. The measure is a revised version of the price cap used during the Covid period. The impact of the earlier price cap was at least debatable: it did not prevent Hungary from becoming the European inflation leader.
The essence of the current margin freeze is that for 30 basic food products, retail profit margins cannot exceed 10% over the purchase price, aiming to curb inflation and excessive price increases. The rule is more of a price and profit regulation than a simple official price ceiling. The government stated that it aims to tackle “unjustified and excessive price hikes” after negotiations with retail chains yielded no results.
The margin rule came into force in March 2025, initially set until the end of May, but it was later extended and applied to additional food products. The government’s aim is to protect household purchasing power from rising prices (or, in other words, to mask the real impact of inflation, at least until the elections). According to some reports, the restriction caused prices of certain products to drop 10–40% in practice within the first days of implementation.
The European Commission raised legal concerns about Hungary’s measure, sending an official notice to the Hungarian government. It argued that the margin cap discriminates against foreign retail chains and may conflict with the EU’s single market principles. Brussels noted that the regulation sets profit margins too low, preventing businesses from covering operating costs and potentially leading to market distortions. On December 11 the Commission gave two months to the Hungarian government to change the regulation or initiate legal proceedings.
Price regulation measures across the region
Beyond Hungary, other Central and Eastern European countries have also adopted similar — though usually more limited or temporary — price regulation measures.
Margin limits in Romania
For example, Romania introduced margin restrictions on basic foods in August 2023, limiting retailers and manufacturers to a maximum 20% profit margin on selected products. The temporary regulation was later extended for several months in 2025 to help curb price increases.
Specific price ceilings in Croatia
In Croatia, the government also introduced consumer price-limiting measures starting in 2023. Initially, 30 basic food and hygiene products were subject to official price ceilings, fixing the maximum retail price in stores. By early 2025, this list expanded to 70 products, including milk, meat, bakery products, vegetables, fruits, and household items, aiming to reduce household food costs and ease the cost-of-living crisis. Large stores were required to clearly label these capped products, and if a product was out of stock, a similar capped product had to be offered. Additionally, the VAT rate was reduced to 5% for capped items to further lower prices for households.
By November 2025, Croatia expanded the list to 100 products, continuing to encourage retailers to offer prices below the official ceiling when market conditions allowed. The goal remained to make essential goods more affordable amid inflationary pressures exceeding the European average.
Slovenia intervenes in fuel market prices
In Slovenia, the government introduced a fuel price ceiling to ensure highway fuel prices did not significantly exceed those on other roads.
Regional boycotts
Regional trends were not limited to price or margin ceilings: several countries in the region implemented alternative consumer protection or market interventions to manage inflation and sharp food price increases. In Southeast Europe (Croatia, Serbia, Bosnia-Herzegovina), consumer boycotts and protest actions occurred in early 2025 against rising food prices. As a result, several chains voluntarily reduced prices on certain products or maintained price ceilings temporarily.
