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Hungarian Government's decree on reducing food inflation to enter into force

January 2024 – The Hungarian government's decree on measures to combat the so-called “shrinkflation” will enter into force on 1 February 2024. “Shrinkflation” refers to the hidden raising of prices by reducing the size of products.

The measures apply to pre-packaged products that are sold by retailers in one or more sizes in a uniform appearance.

The new measures primarily affect convenience store retailers with a net turnover of more than HUF 1 billion, but also expressly impose obligations on manufacturers. Moreover, the obligations of manufacturers forms the basis of compliance. The manufacturer (or the first distributor/wholesaler in Hungary) is obliged to inform both the retailer and the National Food Chain Safety Office (in Hungarian: Nemzeti Élelmiszerlánc-biztonsági Hivatal) of any reduction of the packaging sizes of products.

After the entry into force of the decree, as a general rule, retailers will be obliged to indicate the change of packaging sizes for two months from the start of the marketing of products with a new, smaller size (e.g., 75 grams instead of 100 grams) compared to products manufactured between 1 January 2020 and 1 July 2023, if they replace the previous packaging size with a smaller one. The obligation to inform will also apply to products placed on the market between 1 July 2023 and 1 February 2024. 

In case of non-compliance with the above obligations, the consumer protection authority may impose a fine of up to HUF 1 million per product concerned.

The new decree, however, raises interesting practical questions, e.g., whether smaller retailers will also be obliged to indicate smaller packaging sizes in the interest of consumers and whether the legislator intended to limit the scope of these rules—in accordance with its title —to only pre-packaged food products.

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