Due to new regulations, food will cost more in Hungary

The new Extended Producer Responsibility (EPR) could cause a 4% increase in food prices in Hungary starting in July. Changing product prices is an extended producer responsibility.

According to Agrárszektor, the new Extended Producer Responsibility (EPR), a tax on packaging materials, could cause food prices to increase by as much as 4% starting in July. The new burden, which will account for about 60% of 2021 food business revenues, is many times greater than the old product fee.

The sector will undoubtedly try to pass on the additional cost of 120 billion euros that would result from this. According to the portal, users of packaging materials are required to pay a concession firm, MOHU MOL Hulladékgazdálkodási Zrt., a member of the Mol Group, for the amount utilized under the extended producer responsibility (EPR) system. The portal states that the issue is operators’ ability to increase transfer prices in light of the EPR.

Given the current state of the economy, it is clear that no processor can bear such a heavy load, but it is anticipated that processors with more capital and a stronger negotiating position would succeed in this area.

Future industry price increases will be significant. The size of the load is best illustrated by a few items, according to the industry’s current figures. For instance, the current cost of the well-known 720-milliliter jar, complete with lid and label, is HUF 5. It will increase to HUF 30 as of July.

Future prices for various packaging materials will be three to 10 times higher than they were in the past. In general, multipliers of five to six will shortly be in effect for the majority of commodities. The industry requests that the ministry postpone the implementation of the new system until an agreement can be achieved in negotiations between the industry and the government, given the current circumstances, the considerable cost increase, and the uncertainty.