Hungary: What's the buzz? Accelerated sector inquiry into the mosquito repellent market

Introduction

The Hungarian Competition Authority (“GVH”) has initiated an accelerated sector inquiry into the domestic mosquito repellent market, focusing primarily on single-bid public procurement procedures and the  conduct of tenderers. 

This investigation forms part of a broader governmental initiative to enhance competition levels in public procurement and reduce the proportion of single-bid tenders across Hungary. The national competition authority completed its first accelerated sector inquiry in December 2024, examining the medical equipment market. This was followed by an inquiry into the domestic public procurement market for passenger cars and commercial vehicles, as we summarised in our previous article here.

GVH's proceedings and their background

The mosquito repellent market was chosen as the third area for scrutiny due to the exceptionally high proportion of single-bid procurement procedures in environmental protection services compared to other procurement categories. Mosquito repellent services are considered particularly significant given their impact on the economic functioning of regions with tourism importance and their public health implications.

The accelerated sector inquiry encompasses a comprehensive analysis of competitive conditions in the Hungarian market, with GVH's experts examining the following key aspects:

• the range of participants in procurement procedures and market players present in the relevant product market;
• recent market conditions and trends;
• tenderers' market behaviour and conduct; and
• additional factors contributing to the high number of single-bid procurement procedures, including contracting authorities' procurement practices.

During the investigation, the competition authority employs various methods, to uncover causes of competition distortion and take necessary steps to eliminate them. This includes analysing information collected from market participants through mandatory questionnaires,

The legal basis for this action is derived from the Hungarian Government's Action Plan that aims to substantially reduce the proportion of single-bid procurement procedures in Hungary, thereby fulfilling commitments made to the European Commission. The Hungarian Government specifically requested the GVH to conduct three sector inquiries to identify the underlying causes of single-bid procurement procedures.

Key Takeaways

Once the information gathering process is completed and the corresponding data is analysed, the GVH will summarise the accelerated sector inquiry findings in a public report within 30 days.

Given that accelerated sector inquiries have previously resulted in enforcement action against market participants, close observation of these proceedings will be crucial. This is particularly significant in light of the authority's fundamental goal of safeguarding consumer welfare through substantial intervention in market practices where necessary.

If you need more information or further guidance in this area, please contact Gabor Kutai and Kinga Kálmán.

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