Greece's highest administrative court has upheld a government-imposed cap on gross profit margins for infant formula, ruling that the measure is compatible with both the Greek Constitution and European Union law in a decision that reinforces the state's authority to intervene in markets under exceptional circumstances.
In Decision No. 1084/2026, the Council of State dismissed a legal challenge to a ministerial decree establishing the methodology for calculating operating costs, which determines the maximum gross profit margin that producers and distributors may earn on infant formula and related products. The pricing framework was introduced under Law 5082/2024 as part of the government's response to the inflation surge, with the aim of containing consumer prices and protecting household purchasing power.
The court held that the state may restrict commercial freedom when justified by overriding public-interest considerations, provided such measures remain proportionate. It said the profit-margin cap was warranted by the persistently high cost of infant formula, the product's inelastic demand, demographic concerns and the need to shield consumers from the effects of the global inflation shock.
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The judges found no evidence that the cap compels companies to sell below cost or would lead to sustained financial losses. Instead, they concluded that the measure strikes an appropriate balance between consumer protection and business freedom, describing it as a temporary and proportionate intervention designed to address exceptional market conditions.
The ruling also rejected arguments that the policy violates EU single-market rules. The court said the restrictions apply equally to all suppliers, regardless of whether products are manufactured in Greece or imported from elsewhere in the European Union. Because the measure does not discriminate between domestic and imported goods, it does not amount to a barrier to intra-EU trade or a measure equivalent to a quantitative restriction, even though most infant formula sold in Greece is imported from other member states.
On competition law, the Council of State held that EU rules do not prevent national price-regulation measures where their purpose is consumer protection and they neither distort competition nor facilitate coordination among market participants.
