The “Association of Baby Food and Special Nutrition Companies of Greece” which represents the largest companies active in Greece in the field of infant and child nutrition appealed to the Council of State and requests to invalidate the cap as unconstitutional and illegal which was placed on the profit margin of companies that produce and market infant formula and infant formula.

In the application for annulment at the SC, the Association argues that the ceiling imposed on this category of children’s products is contrary to European legislation, and to constitutional provisions, such as business and economic freedom, free competition, the principle of equality, etc. etc.), while the ceiling prices are arbitrary and below the cost of production and distribution.

The ceiling

It is recalled that the Ministry of Development decided to impose a ceiling on the gross profit margin for baby milk (entered into force on March 1) in order to rationalize prices. In particular, according to the decision, the gross profit margin it cannot be greater than the operating cost of the business in the specific product category, based on the financial statements of the immediately preceding management period, increased by 7% on net sales, minus discounts, credits or other benefits.

Also, based on the decision there is also a limitation on operating costswhich cannot exceed the average operating cost of the business, as reflected in the financial statements of the last published financial year, increased by 60%.

In case of violation the amount of the fine set equal to 1% of the company’s turnover during the management year starting in 2022.