Retail Chains Law

On 13 December 2021 a draft bill was presented in the Hungarian Parliament which has significant implications for retail traders of food products. The bill appears to address a genuine and topical issue i.e. waste, in a way which will principally hit the large and mostly foreign owned food retailers.

The bill introduces the following notable new measures:

Food retailers shall offer the food products at least 48 hours before the expiry of the minimum durability of the food to a state-owned company (the Food Saving Center Non-profit LLC) (the “FSC”) without consideration. For this purpose, the trader shall conclude an agreement with the FSC the contains or terms of which are not clarified by the law yet. The obligation to offer the food products applies to retail traders of food products having at least HUF 100bn (EUR 272m) annual net sales revenue (excluding excise tax and products health tax). The FSC will organize the distribution of the food products contributed under this arrangement to charitable organizations.

The trader shall prepare a plan for food waste reduction and file it with the FSC and shall also appoint a person responsible for executing the plan. If the food waste exceeds the amount projected in the plan by more than 2% on annual basis, the trader can be subject to a fine. The highest amount of fine is 0.6% of the previous year’s supervision fee (i.e. the fee payable to the food chain authority annually by the participants in the food chain (i.e. traders, producers of food, etc.) levied on the sales revenue of the participant at the rate of 0.1%).

The highest rate of retail tax would be increased to 2.7% from 2.5%. This rate applies to the amount of revenue in excess of HUF 100bn of net sales.

The draft bill has been accepted on 14 December 2021 and will be applicable from 1 February 2022.

Please contact Balázs Kántor or Iván Sólyom at LKT if you need more information on the bill.