Mandatory Deposit Refund System (DSR) comes into effect as of 1 January 2024 in Hungary. The newly introduced legislation clarifies the key points of the system and the specific obligation of the parties concerned.
As a general rule, from a consumer’s perspective, deposit refund schemes charge users an extra fee when they buy a product, which is refunded if the product packaging is returned for recycling or reuse. Similar, but not unified schemes have already been implemented throughout the EU with Hungary joining in as of 1 January 2024.
The Mandatory Deposit Refund System will apply generally to the non-reusable or reusable packaging of ready-to-drink or concentrated beverage products, in the form of bottles or cans, plastic, metal or glass material, with a capacity of 0.1 to 3 litres (but excluding milk and milk-based beverage products). Small producers under 5000 covered products a year are exempted from the DSR obligation. Producers are also free and encouraged to extend the DRS voluntarily to additional items not covered by the mandatory DRS.
DRS will be operated and monitored by MOHU, a subsidiary of MOL Nyrt. as concessionaire.
Producers are required to register their products 45 days prior to placing those on the market and to pay connection fee and service fee for reusable products subject to a mandatory return fee, and a connection, service and return fee for non-reusable products to MOHU. With the introduction of DSR, EPR (extended producers’ responsibility) legislation has been also amended so that the EPR fee does not apply, where a DSR fee is due.
Distributors are required to accept and refund the products under DSR. In practice, for stores selling food with a sales area of more than 400 sqm, the return and refund should be made available via automatic reverse vending machine. Such machines, based on the request of the distributor, are to be provided by MOHU. The mandatory deposit of HUF 50 per non-reusable product will be charged and invoiced to and paid by the consumers and will be refunded upon return (deposit for reusable products will be set by the manufacturers).
The registration of producers and application for reverse vending machines was due earlier this year, but the registration for products is still open by 15 November 2013 and for voluntary DRS continuously going forward.
By Bálint Zsoldos, Head of Tax, KCG Partners Law Firm