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Deposit Refund System is on the Horizon

Deposit Refund System is on the Horizon

Hungary
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The grace period until 30 June 2024 is slowly expiring for manufacturers to market products that do not yet comply with the Deposit Refund System (DRS) rules.

The essence of the DSR rules is that certain products, described below, are subject to mandatory refunds and therefore the manufacturer increases the price of the product by a certain amount of money to facilitate recycling. The legislator hopes that this will lead to a much higher proportion of consumers returning these products in order to encourage recycling.

The DSR rules are in force from 1 January 2024 and apply to ready-to-drink or ready-to-drink beverage products (except milk and milk-based products) packaged in plastic (PET), metal or glass base materials and with a capacity of 0.1 to 3 litres. The DRS fee is currently HUF 50. Following the logic of the regulation, if the final consumer returns the product, it will be returned to the manufacturer, who will be able to refill a part of it after an appropriate procedure. The other part of the products - where refilling is not possible due to the quality or quantity of the plastic - is processed and incorporated into different plastic products (the new DRS rules will only apply to the latter, as this plastic is considered waste after returning it).

As of 15 November 2023, manufacturers are already required to register their products, with notification required 45 days before the products are placed on the market, the grace period for this is going to end on 30 June 2024. Products for which this registration obligation has not been fulfilled are not to be placed on the market and will be subject to a mandatory recall. The producers are obliged to advance the HUF 50 fee for the products to the waste management concessor (MOHU Zrt.). If the product is not returned, the HUF 50 fee remains with MOHU. This is a clear incentive for manufacturers to encourage consumers to return as many products as possible. It is mandatory to allow for returns in grocery stores with a floor area of more than 400 square meters, which can be purchased by the stores concerned from MOHU.

By 2029, the EU target is for at least 90% of products covered by the DRS to be redeemed, with the exception of small producers (who place on the market less than 5,000 units of products otherwise covered by the DRS).

By Bálint Éberhardt, Attorney at Law, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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