The Hungarian government’s decision to block the takeover of one of the country’s largest dairy processors, Alfoldi Tej Kft, by a foreign investor has brought back into focus an increasingly visible trend in the European Union: state intervention in protecting strategic companies in the agri-food sector, in the name of supply security and national interest.

Hungary – The Alfoldi Tej Precedent (2025)

In mid-September 2025, the government in Budapest decided to prohibit the acquisition of Alfoldi Tej Kft – responsible for approximately 20% of Hungary’s raw milk purchases – by a non-resident investor. The reasoning was clear: there is a heightened risk that the milk collected in Hungary would be exported instead of being processed locally, which could destabilize the domestic dairy market and lead to higher consumer prices.

The decision is based on recently amended Hungarian legislation, under which the state may exercise pre-emption rights and block any transaction that affects strategic sectors, including food. It signals the strengthening of the food sovereignty doctrine, actively applied by several European governments in recent years.

Relevant European Precedents

France – Blocking Carrefour’s takeover by Couche-Tard (2021)

In 2021, Canadian group Alimentation Couche-Tard launched a bid of around USD 20 billion to acquire Carrefour, France’s leading food retailer. The French government, through Economy Minister Bruno Le Maire, immediately blocked the deal, stating that “Carrefour is an essential player for France’s food sovereignty.”

Although no formal “golden power” regulation was invoked, government opposition alone was sufficient to withdraw the offer. This case became a reference point in Europe for how public interest and strategic considerations can outweigh investment freedom, even within the EU.

Italy – Veto on the takeover of Verisem by Syngenta (2021–2022)

Also in 2021, the Italian government used its “golden power” regime to block the takeover of Verisem, a major vegetable seed producer, by Swiss-based Syngenta, controlled by China’s ChemChina. The justification? The transaction would have externalized control over a critical segment of the Italian agri-food chain, with possible negative implications for national agriculture.

The government’s decision was challenged in court, but in April 2022, Italy’s administrative judiciary upheld the legality of the veto, reinforcing the state’s prerogatives regarding foreign investments impacting agriculture.

Spain and Germany – Increased vigilance without formal vetoes (2021–2024)

While there have been no concrete cases of blocked transactions in the agri-food sector, Spain and Germany have introduced additional monitoring and notification requirements in recent years for investments in strategic sectors. In Germany in particular, authorities have closely scrutinized takeover cases in the agritech industry, signaling openness to future restrictions if technological or food sovereignty were perceived to be under threat.

The Future of Food Investment Regulation in the EU

Recent decisions, led by that of the Hungarian government, point to a new era of strategic protectionism in the agri-food domain. Against the backdrop of multiple crises — pandemics, wars, supply chain disruptions — many European states are becoming more vigilant and proactive in controlling who owns critical food infrastructure.

A dual paradigm is taking shape:

• Openness to foreign capital remains important for investment.
• But the protection of national interest prevails when it comes to food, water, energy, and health.

In this context, Hungary’s case is not an exception but part of an emerging European trend, where food security is treated as a matter of national security.

(Photo: Freepik)