Lidl GmbH v Nemzeti Adó- és Vámhivatal Fellebbviteli Igaz...

Facts

• The dispute originated in Hungary concerning national rules that required food products to display specific labeling, including details about the manufacturer and the country of origin.
• Lidl GmbH, a German supermarket operating in Hungary, contested these labeling requirements.
• Lidl argued that the mandatory labeling imposed disproportionate burdens on cross-border trade and reduced distribution efficiency throughout EU member states.

Issues

1. Whether Hungary’s mandatory labeling requirements constituted a justifiable restriction on the free movement of goods under EU law.
2. Whether the Hungarian regulations met the EU principle of proportionality.
3. Whether the Hungarian government had provided adequate justification for the labeling restrictions.

Decision

• The CJEU applied a two-stage proportionality test, assessing both the suitability and necessity of the Hungarian labeling measures.
• The Court recognized that consumer protection and preventing misleading information were legitimate aims.
• However, Hungary’s requirements were deemed not strictly necessary to achieve those aims.
• The CJEU observed that less restrictive alternatives, such as providing information online or in-store, could protect consumers without impeding cross-border trade.
• The justifications provided by Hungary for the restrictions were insufficient.
• The measures were found disproportionate and incompatible with the free movement of goods under EU law.

Legal Principles

• National regulations must not exceed what is necessary to achieve legitimate public interest objectives, according to the EU principle of proportionality.
• Restrictions on fundamental freedoms such as free movement of goods require strong, evidence-based justification and a direct link to the objective.
• Member states must opt for less restrictive alternatives if these can achieve the intended regulatory goals.
• The proportionality and justification of national restrictions must be evaluated through a rigorous analytical framework.

Conclusion

The CJEU ruled that Hungary’s food labeling requirements were disproportionate and insufficiently justified, affirming that national measures affecting the internal market must be proportionate, justified, and no more restrictive than necessary.