This paper examines the effect of royal warrants in the United Kingdom (UK) and Denmark on the internal market of the European Union (EU) in relation to applicable EU legislation and case law on state aid and the free movement of goods. Firstly, the paper examines the British and Danish monarchies’ selection procedures for the companies awarded royal warrants. Secondly, it discusses the economic effect of royal warrants on competition on the internal market. Thirdly, EU provisions and case law on state aid are outlined and discussed in relation to the award of royal warrants, followed by a discussion of the concept of the state and ‘emanation of the state’ in EU and national law. In order to complement the legal definition of state, the political role and powers of the Danish and British monarchies are examined. Lastly, royal warrants are discussed in relation to the free movement of goods (Article 34 TFEU) and the effect of ethnocentric campaigns on the internal market. It will be demonstrated that monarchies fall within the concept of ‘emanations of the state’ and that they are therefore obliged to comply with EU provisions on state aid and free movement of goods. The examination of the economic effect of royal warrants points to the fact that royal warrants distort competition and affect trade on the internal market because they are likely to provide selected businesses with a disproportionate advantage over their competitors. The paper concludes that the Danish and British monarchies’ awards of royal warrants contravene the provisions on state aid and free movement of goods under EU law. The paper additionally demonstrates that monarchies favour products of their own national origin, which constitutes a discriminatory measure.