In the past years, several new EU Member States have started investigations regarding the quality of products. Investigations showed that in many cases products have more detailed descriptions attached, or simply have more active substance if they are sold in the Western Member States than in the Central and Eastern European Member States. It was suspected for a long time that there are quality differences between the same products, sold in the same packaging but in different countries.
Eastern Member States, who are affected by this phenomenon the most, have raised their voices that the EU shall act and punish dual quality accordingly. The voices of the Member States have been heard and the EU adopted legislation to fight the dual quality among the EU, that is going to enter into force on 28 May 2022.
The new legislation was also backed by research conducted by the Hungarian Authorities in early 2021. The scope of the research was cosmetic products that can be purchased both in Germany, Austria, Italy and in Hungary. The research found that at least 30% of the inspected products was of a lesser quality when it was sold in Hungary.
According to the new legislation implemented by Hungary in December 2021, if it is proven that a company applies dual quality, then the company in question can be fined up to 5% of their income, maximum HUF 500 million in case of multinationals (~ EUR 1,380,000). There are intentional loopholes left in the new act where companies can be exempted from the fine, if the difference of the product can be justified with circumstances that vary from place, time, season and local customs.
By Rita Parkanyi, Partner, KCG Partners Law Firm