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Hungary Implemented EU Legislation to Fight Dual Quality

Hungary Implemented EU Legislation to Fight Dual Quality

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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

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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