Price controls on essential food items: consultation paper

Annex B: International Examples

The impact of food inflation is not an issue unique to Scotland: it is a recognised and persistent problem that governments across the world are seeking ways to tackle. There are a number of international examples of price control measures to consider as comparators. These examples are not intended to represent preferred models. They are included to illustrate the different ways in which governments have attempted to improve food affordability through interventions in retail food pricing.

Croatia

Price caps for a number of food items were introduced in Croatia in 2022. The list of qualifying items was expanded in 2023 and 2025 and now comprises 29 products and 71 categories of product and includes some hygiene items as well as foodstuffs. A Government decision set a maximum retail price. For capped products (e.g. sunflower oil), retailers are required to sell all products matching the product specification to be sold at or below the capped price. For category caps, retailers are to ensure that at least one item within the category was sold below the regulated price. If the designated item is unavailable, another product in the category must be substituted. This is similar to the replacement product approach discussed in Chapter 2.

This measure was introduced as part of a package of measures to combat rising food inflation, including a reduction in VAT for food items. Public concern about food prices and consumer campaigns directed at supermarkets also contributed to political pressure for intervention.

The stated aim of the Croatian intervention was to provide immediate relief to households faced with rising living costs. As the policy evolved, the list of products and categories included has increasingly been based on goods that consumers commonly purchase.

A report by the Institute of Economics in Zagreb on retail caps in Croatia stated that when the September 2023 expansion was introduced, the caps for newly added products were generally set substantially below prevailing market prices. Across the newly added products, the sum of the caps was approximately 23.6% lower than the sum of equivalent prices observed on 31 December 2022. Most individual caps were set between 10% and 53% below those prices.

The available evidence from the report suggests the policy reduced measured inflation and provided some relief to consumers, particularly lower-income households^[12]. The report finds that lower-income households were potentially more affected by the policy because they spend a greater share of their budgets on food and other frequently purchased essentials covered by the caps.

The Croatian measures do not include a statutory review mechanism, expiry date or sunset clause. The measures remain in force until amended or repealed by the Croatian Government.

Hungary

The Hungarian Government has also sought to tackle the issue of food inflation through the use of retail price caps; mandatory discounting; and profit margin caps.

A retail price cap was introduced in February 2022. This scheme fixed the retail prices of a small number of staple foods (sugar; flour; sunflower cooking oil; milk; some types of chicken meat; and some types of pork meat) at their October 2021 levels, and also required retailers to maintain minimum stock levels. Fines were levied for non-compliance. In November 2022 the policy was expanded to cover eggs and potatoes.

The price cap was removed in August 2023 after 17 months in operation. It was replaced with a system of mandatory discounting, which required retailers to offer 10% discounts on the price of around 20 selected product categories. This discounting requirement was later increased to 15%.

In Spring 2025, with food inflation again accelerating in Hungary, the Government introduced a cap on retail profit margins. Rather than directly fixing final consumer prices, this policy stipulates that the profit margin retailers can apply to selected products may not exceed 10 percent or be higher than the average margin applied to the product in January 2025. The policy applies to around 30 categories of basic food products (around 1000 individual products). Retailers are expected to ensure continuous availability of the selected categories, providing at least the average daily quantity that was sold in 2024. There are also restrictions on the proportion of “private label” or own brand products that can be offered. These requirements only apply to large retailers (defined as those with an annual turnover above 1 billion Hungarian Forints). Compliance is subject to inspection, and fines can be levied for exceeding the allowed margins or for product availability violations. This policy is still in effect.

Both the retail price cap and the profit margin cap have been subject to legal challenge. SPAR Magyarország (SPAR Hungary) were fined for failing to comply with the minimum stocking requirements associated with the retail price cap. Their legal challenge to the Hungarian court was subsequently referred to the Court of Justice of the European Union (CJEU). In September 2024, the CJEU issued a preliminary ruling that the retail price cap policy was incompatible with EU law. Whilst they acknowledged that the stated aim of combating inflation was legitimate, they found that the market distorting effects of the measures were disproportionate to achieving that objective.

In July 2026, the European Commission referred Hungary to the CJEU^[13] for the decision to impose profit margin restrictions, on the grounds that the limit is of such a low level that it would compel retailers to sell their products at a loss. They argue that the policy does not take account of the full range of costs incurred by traders, which are wider than simply the costs of purchasing their products.

The Commission also noted that, due to the minimum turnover requirement, the profit margin cap predominantly applies to foreign retailers operating in Hungary. The Commission considers that this constitutes a violation of the Services Directive and of Article 49 of the Treaty on the Functioning of the European Union (TFEU). These instruments require public authorities to ensure the equal treatment and non-discrimination of economic operators and to refrain from restricting economic activities unless such restrictions are justified to attain certain public interest considerations. The Commission is of the view that the profit margin cap breaches these rules by making it less attractive for foreign retailers to operate in Hungary.

Mexico

Mexico adopted a voluntary, negotiated approach to food affordability through the Paquete Contra la Inflación y la Carestía (PACIC). Under the scheme, the federal government reached agreements with major food manufacturers, distributors and retailers to limit the total cost of a basket of 24 staple food products. Rather than imposing maximum prices for individual items, the policy established a maximum total price for the basket, allowing retailers flexibility to determine the prices of individual products provided that the overall basket remained below the agreed threshold.

To support implementation and limit cost pressures, the government temporarily reduced regulatory requirements and removed import duties on a range of food products and inputs. The scheme was subsequently renewed and modified on several occasions. As inflationary pressures continued, the government negotiated a lower basket-wide price ceiling and introduced a specific price cap for beans, which are a politically and culturally significant staple food. At the same time, some import measures were revised or withdrawn to support domestic agricultural producers. More recently, the scheme was further extended with a greater focus on accessibility in rural and remote areas, reflecting concerns that the benefits were concentrated in larger supermarket chains and were not always reaching consumers who relied on smaller retailers and local stores.

France

France adopted a voluntary rather than statutory approach to food affordability through the Trimestre Anti-Inflation ("Anti-Inflation Quarter"), launched in 2023 following a period of elevated food inflation. Under the scheme, retailers committed to offering a basket of products at particularly low prices for a three-month period. The government did not prescribe which products were included or the prices that should be charged, instead allowing retailers discretion in designing their offers.

Following the conclusion of the scheme, the French Government continued discussions with major retailers and food manufacturers to secure price reductions on a broader range of products. As part of these negotiations, approximately 75 food manufacturers agreed to reduce prices on around 5,000 products, with reported reductions ranging from 2% to 10%. The French approach therefore relied heavily on negotiation and voluntary agreement throughout the food supply chain rather than direct regulation of retail prices.

France also introduced measures to improve price transparency, including legislation aimed at tackling so-called "shrinkflation". Retailers became required to provide information where the size or quantity of a product had been reduced while the unit price had increased or remained unchanged. The intention was to help consumers identify hidden price increases and improve transparency in retail pricing.