Austria takes legal action against retail chains over discount practices

Austria’s Ministry of Social Affairs has filed a lawsuit against major retail chains Spar, Billa, Hofer, and Lidl, accusing them of misleading discount advertising. According to the Austrian Press Agency (APA), the government argues that advertised promotions often exaggerate savings and breach the country’s Pricing Act.

The move comes amid sharp increases in food prices in Austria, which have drawn growing criticism from both consumers and regulators. Natalie Harsdorf, head of the Federal Competition Authority, said that improving price transparency could help reduce food costs by up to 4%.

Authorities have also highlighted broader issues linked to territorial supply restrictions within the EU. Such practices prevent retailers in smaller member states, including Austria and the Czech Republic, from sourcing goods at cheaper prices available in larger markets like Germany. Harsdorf noted that eliminating these restrictions could lower Austrian consumer prices by as much as 8%.

The European Parliament has identified both direct and indirect forms of such restrictions. Direct restrictions include rejecting orders, limiting quantities, or blocking cross-border sales. Indirect measures can involve variations in packaging, labelling, or product composition between different markets.

A European Commission study from 2020 found that a majority of Czech retailers had experienced some form of territorial restriction. Across the EU, 49% of surveyed companies reported encountering such barriers, while 31% said they had not. Around 30% cited differences in packaging or labelling, and 27% noted variations in product content.

The Austrian lawsuit is expected to test how national enforcement interacts with EU-level competition rules, where policymakers continue to debate how to eliminate supply restrictions that create price disparities across the single market.

Source: CTK