When Gender Policy Meets Competition Law: The Austrian VAT Exemption on Menstrual Products and the Role of the Competition Authority

In this article in Kluwer’s Competition Blog, author Barbara Justen looks into Austria’s decision to abolish VAT on women’s hygiene products and certain contraceptives from January 1, 2026, and the unusual role assigned to the Austrian Federal Competition Authority (BWB) in overseeing the policy’s effectiveness. The reform aims to reduce the financial burden associated with menstruation and contraception by exempting these products from VAT. What makes the measure distinctive is that the competition authority may review whether the tax savings are actually passed on to consumers through lower retail prices.

The VAT exemption was introduced as part of broader gender policy efforts to address the so-called “tampon tax,” recognizing menstrual products as essential goods rather than discretionary items. Previously subject to a reduced VAT rate of 10 percent, the products are now fully exempt. However, the success of the policy depends on retailers and suppliers reflecting the tax reduction in consumer prices rather than absorbing the savings as additional margin.

Under Austria’s Price Act 1992, the BWB has the authority to investigate whether statutory price or tax reductions are passed on to consumers. If there are signs that the expected price decrease has not materialized, the authority may launch sector-wide inquiries even without evidence of cartel behavior or abuse of dominance. In this case, the BWB indicated it may monitor price developments in relevant markets and intervene if the VAT exemption fails to translate into lower prices.

Justen argues that the measure illustrates a broader evolution in competition policy, where authorities increasingly ensure that markets deliver the outcomes intended by legislation. While similar pass-through investigations have occurred in other sectors—such as VAT reductions on solar panels—this case stands out for its gender-policy dimension. The approach highlights how competition law tools can support socially motivated legislation, while also raising practical challenges in determining whether price changes are truly linked to tax policy rather than other market factors…

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