New Hungarian Market Regulations

A new act on agricultural market regulation entered into force on 4 April, 2003, and it introduced some conradictionary rules for sales agreements in the agricultural sector. Typical agricultural products, processed foodstuffs, wines and champagnes fall under the scope of the Act.
The Act stipulates that the above mentioned agricultural and food products may not be sold at a lower price to consumers than the purchase price agreed upon with the producer, manufacturer or wholesaler.
The Act also stipulates that the deadline for payment of the of the agricultural products may not exceed 30 days of the receipt of the invoice by the purchaser, otherwise the purchaser must pay a punitive interest (twice the base interest rate of the Hungarian National Bank).
As the Hungarian Civil Code declares the freedom of contracts, from civil law point of view the new Act is restrictive.

From competition law point of view the new Act is restrictive as well, as the Competition Council declared that „prohibition of selling products for a price equivalent or less than the purchase price shall be considered unfair market practice”. As a consequence, more than one petition has been filed at the court of constitution to set aside this new law as anti-constitutional.