The Government of the Republic of Serbia has repeatedly amended the Regulation on Special Conditions for Trade in Certain Types of Goods (“Regulation”), with the aim of limiting retail margins and stopping price increases. The Regulation was issued under Article 39 of the Trade Law as a temporary market protection measure, effective from 1 September, with the latest amendments being in force since 1 December 2025. We have already analyzed the Regulation in one of our previous articles.

Recent Amendments and Their Practical Application

The most recent amendments, including exceptions for fresh fruits and vegetables, fresh meat and fish, eggs, tea, frozen fruits, honey, as well as exchange-traded goods such as coffee and cocoa, attempt to mitigate the direct impact of margin limits on products whose prices naturally fluctuate. However, the amendments themselves show the reactive nature of the Regulation: the state constantly adjusts the rules based on market pressure and criticism, instead of defining rules in advance through a detailed analysis of economic factors.

Electronic submission of price lists, detailed tracking of fees, and the obligation to conclude contract annexes with suppliers additionally burden retail chains and their suppliers both administratively and financially. In practice, this creates a constant burden of monitoring and compliance, which particularly affects chains with a wide assortment.

Margin and Fee Limits – Short-Term Solution with Long-Term Risks

The limitation of margins to 20%, with additional limits on fees and special rules for freezers and exchange-traded goods, may appear as an effective measure for controlling shelf prices. However, in the long term, such an approach creates unpredictability and reduces the flexibility of the supply chain. Retail chains cannot adjust prices in line with procurement cost changes, which can lead to reduced product availability, loss of profitability, and potential withdrawal of certain products from the market.

Reactive and Fragmented Regulation

Frequent amendments and the introduction of exceptions for certain products show that the regulation is not based on a detailed analysis of the market and cost structure, but rather on ad-hoc reactions to pressure. Such an approach is problematic as it complicates business planning and long-term investments, creates legal uncertainty, particularly for foreign suppliers, and increases the risk of counterproductive effects, e.g., reduced product supply or price increases for products that are not exempted.

Trade Freedom and Constitutional Issues

State intervention in the relationships between market participants must be justified, necessary, and limited. The current approach, without serious analysis and clear criteria, brings legal challenges and opportunities for dispute, especially if some temporary restrictions were to become permanent.

Let us remind that the Constitution of the Republic of Serbia stipulates that the economic system in the Republic of Serbia is based on a market economy, open and free markets, freedom of entrepreneurship, independence of business entities, and equality of private and other forms of property, as well as that the Trade Law stipulates the principle of free trade, which may only be limited temporarily and exceptionally.

Administrative and Operational Burden

Requirements for electronic submission of price lists in a machine-readable format, updating contracts with suppliers, monitoring and limiting fees and discounts increase operational costs and complexity. This particularly affects smaller entities and may lead to market concentration, where larger chains can more easily absorb the administrative burden, while smaller ones are forced out of competition.

Inadequate Consideration of Market Mechanisms

The Regulation does not take into account the different characteristics of markets and products: exchange-traded products, seasonal products, and products with high logistics costs do not function under a fixed margin principle. Limitations that ignore these differences can lead to market distortions, e.g., product shortages, reduced quality, or higher prices for products that are exempted.

Instead of a Conclusion

Given the government’s actions and the announced adoption of the Law on Unfair Trade Practices, drawing any conclusion is certainly premature.

Although the Regulation aims to protect consumers from price increases, its current form and frequent amendments indicate a problematic combination of state intervention and lack of market analysis. Businesses face significant administrative and financial burdens, legal uncertainty, reduced flexibility in procurement and inventory management, as well as potential negative effects on the availability and quality of products.

For long-term sustainable functioning of the market, state intervention must be limited, targeted, and proportional, with clear economic rationale and mechanisms to monitor effects. The current approach, based on urgent amendments and restrictions, represents a short-term solution with potentially counterproductive consequences for the market.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.