The European Commission has launched infringement proceedings against Hungary saying new national legislation on retail of agricultural and food products are contrary to EU law.

According to the Commission, 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”.

The Commission said the law “may discourage sales of imported agricultural and food products in comparison to domestic ones” – which runs against the principle of free movement of goods.

The Commission said on 15 February it had sent a formal letter on the issue to Hungary, which has two months to comply with EU law or face heavy fines.

In a separate move, the Commission has launched infringement proceedings against Romania, saying the country had breached EU laws by requiring retailers to buy at least 51% of food and agricultural products from local producers.