The Regulation on the Limitation of Margins, which created a real economic carom in Serbia and reached the officials of the European Union, lasts until February 28, 2026.
The President of Serbia, checking the prices of chocolate milk and other products last summer, announced it as a measure that will bring 15 to 20 percent lower prices. These figures did not come close to being realized, as prices continued to rise during the autumn. The country went the farthest in September, when it recorded, at least according to the official statistics of the Republic Institute, a 4,5 percent drop in the prices of non-alcoholic beverages and food. However, that month too, prices have actually continued to rise by about two percent, if you add up everything we pay.
The state, on the other hand, drew the ire of the European Union, which complained about state intervention in the supposedly free economy, and numerous chain stores were closing stores and laying off workers, because they performed significantly worse.
After this specific economic maneuver, economist Dragovan Milićević told "Vreme" that he does not expect the state to extend this measure.
"Although there have been no announcements yet, the Regulation was changed four times after it was passed, and each time certain groups of products were separated from it and thus diminished," says Milićević. "What can happen is that the state makes changes to the Trade Act, which will define the relations between bidders and large trade chains. This would be a way for the state to permanently set those prices before the product reaches the shelves. I believe that this decision would also cause strong reactions from traders, if only they are affected, but also from the European Union."
What will happen to the prices?
Milićević says that if the measure is not extended and no changes are made to the law, there will be changes in actions. Because the state artificially froze the prices of 20.000 products for six months, so it would be logical to change them when the regulation is unfrozen.
"The biggest question is whether there will be big price increases in stores when the measure expires," says the economist. "Even though we are a poor nation, merchants will surely raise prices where they feel there is demand. Especially since they have been doing poorly for months because of the regulation."
Although the decree froze purchase prices, the level of retail prices remained high for consumers, because there were no actions and promotions like before the decree. Thus, the volume of sales of manufacturer brands fell, and the turnover of private brands increased, because the prices of marketing and other services of those products are lower. After the regulation expires on February 28, the biggest effect will come from the unfreezing of purchase prices, as all producers and importers will issue new price lists, with prices increased by cost growth from August 20225, and this may cause an inflationary shock.
Copying from Orban
Vucic may have seen this measure in his colleague Viktor Orban in neighboring Hungary. In March 2025, some half a year before Serbia, this country introduced a ten percent limit on retail margins for 30 basic food products in response to rising prices. This was preceded by the fact that Hungary had the biggest jump in inflation in the European Union since Russia's invasion of Ukraine in 2022.
Since then, the Government of Hungary has only extended the duration of the regulation and expanded the range of products it covers, in contrast to Serbia, which immediately after the adoption of the regulation began to reduce the number of products to which the decision applies. According to the latest decision, the measures will also be in force in Hungary until the end of February 2026.
International litigation
Düsseldorf Handelsblat he wrote during the fall that Serbia looks up to neighboring Hungary, where foreign companies have been complaining to the state for years that special taxes and bureaucratic obstacles are being imposed on them. Due to margin restrictions, the European Commission opened proceedings against Hungary, and after a lawsuit against Austria Savings.
"Serbia could also initiate some litigation before, for example, the International Court of Justice in Paris, because Trade Law, in article four, clearly mandates that 'trade on the market is carried out freely' and that 'restrictions on the freedom of trade are prohibited,'" adds Miličević.
The cap on retail margins in Hungary has sparked protests from foreign traders, with some calling on the European Commission to take action against Budapest, arguing that the measures disproportionately target foreign companies as only some Hungarian traders are affected. In mid-December, the EC ordered Hungary to lift the margin limit for the next two months and threatened them with legal action.
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