Within the next 10 days the companies producing and marketing baby milk are required to inform the Interagency Market Control Unit (DIMEA) of the data for determining the amount of their operating costs, in order to apply from March 1, 2024 a ceiling on the profit margin.

This is defined by the ministerial decision of the Ministry of Development which was published in the Government Gazette (Issue B’ 631/29.01.2024) in the context of the legislation passed by the Parliament “to protect the purchasing power of the consumer public in the context of acute international inflation crisis” while another ministerial decision is expected to be signed within the day, regarding supplier discounts to supermarkets and the prevention of unjustified price increases.

According to the decision on infant milk, the gross profit margin cannot be greater than the operating costs of the business, in the relevant 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 and the operating cost of the relevant category may not exceed the average operating cost of the company , as reflected in the financial statements of the last published financial year, increased by 60%.

To detect violations an administrative or on-site audit may be carried out, ex officio or following a complaint, by the bodies of the competent authorities, i.e. the General Secretariat of Trade of the Ministry of Development and the Interagency Market Control Unit (DIMEA). In addition, administrative sanctions are imposed on anyone who obstructs or obstructs the control in any way.

In case of violation of this regulation, a fine is imposed which is calculated based on a specific mathematical formula.

That is, the number of days between 1 March 2024 and the day on which the violation was detected by the competent control authorities, the amount of the company’s gross profit in the single category of infant formula and second infant formula is calculated , as reflected in the financial statements of the last published financial year and the percentage of the penalty on the company’s sales in the product category for which the infringement was found during the management year starting in 2022.

If the violation concerns an excess of up to 1% of the predicted profit, the penalty of the recommendation is imposed once. In case of recurrence or non-compliance of the company with the recommendation, a fine is imposed, increased by an additional 20%.

In case of concealment or presentation of falsified information, a fine equal to 1% of its turnover during the management year starting in 2022 is imposed on the company. However, the fine is not imposed if the company provides the requested information within 10 days following a request from competent control agency.

Finally, according to the legislation, the decision to impose a fine can be appealed before the administrative courts.