Sustainability claims - Hungarian Competition Authority published market analysis report on 11 January 2024

24/01/2024

The HCA made recommendations for businesses (impact assessment), the lawmaker (green labelling scheme) and enforcers (logos and label check).

On 11 January the Hungarian Competition Authority (which has dual powers to enforce competition/antitrust and unfair commercial practices legislation) published its market analysis report on sustainability claims. The market analysis started in 2022 and was based on a consumer perception study (covering food, fashion and household chemicals products), a sweep of websites for environmental claims, information requests and a survey of advertisements and the review of findings of other national authorities.

The HCA has made several recommendations in the report:

1., to market players:
a; to conduct a full environmental impact assessment to better understand the overall impact of their products, and focus their sustainability related communication on the areas where their environmental efforts matter the most for negative impact reduction (the HCA sees the focus of existing environmental claims on packaging, whereas in many cases packaging represents a much lesser environmental impact than the product);
b; to use only verifiable claims and provide verification tools to consumers
c; avoid vague or generalized claims as those are capable of misleading consumers.

2; to the legislator: the HCA proposes various aspects to a future sustainability and environmental impact labelling scheme

3; to the enforcer: to strengthen the enforcement review over claims and logos.

The market analysis report is likely to be followed by increased enforcement of sustainability related consumer protection requirements in Hungary. The report likely will set future standards of the HCA’s expectations towards the diligent trader, and the HCA will likely use the report and the underlying research findings to substantiate its cases. Meanwhile, the burden to prove the validity of the (sustainability) claims will continue to rest with the traders.

The report is the last of a series of green claims related enforcement action by the HCA, which include a Guidance Paper for businesses on green claims, and various cases developed over the years.

Contact: Eszter Ritter