After the March introduction of a 10% price margin cap on various basic groceries, now a 15% price margin cap has been introduced for various household products. The new rule is expected to remain in place until the end of August.
Compliance with the new price margin cap
The new regulation is most relevant to big retail chains that had yearly revenue above HUF 1 billion in 2023 if their main activity is marked as code 47.75 in NACE (or TEÁOR in Hungarian), which covers the retail sale of cosmetic and toilet articles. As such, the regulation does not concern small businesses that operate many small convenience stores or “mom-and-pop stores” in Hungary.
The price margin cap came into force on May 19, 2025, and will remain in force at least until August 31. During this time, retailers cannot increase the margin they have been applying to certain household items (see a list of 30 categories below). The regulation applies to both physical and online stores.
List of household products concerned
The list includes categories for household products that are considered basic necessities by the government, meaning various products for cleaning and personal hygiene.
- Toilet paper
- Kleenex (facial tissue or paper handkerchief)
- Tin foil
- Paper towel rolls
- Fabric softener
- Liquid detergent
- Washing powder
- Dishwasher detergent
- General cleaning agent
- Liquid scouring agent
- Dishwasher tablets
- Shower gel
- Toothpaste
- Liquid soap
- Shampoo
- Soap
- Toothbrush
- Hand sanitizer
- Shaving foam
- Shaving gel
- Body lotion
- Roll-on deodorant
- Antiperspirant stick
- Deodorant
- Disposable razor
- Razor refill
- Menstrual pad
- Tampon
- Baby powder
- Disposable diapers
At most 15% margin on household products
While the price margin cap remains in place, retailers cannot increase the margin they apply to the prices of the above listed types of household products. The baseline is the average margin applied throughout January 2025.
- If the previous margin was above 15%, the margin must be decreased to 15%.
- If the previous margin was below 15%, it should be maintained.
- If the retailer was not selling an item in January 2025, either a 15% margin or the margin they applied during the last month they were selling it should be applied now; whichever is lower.
In case of store brands, the production cost should be considered instead of the wholesale price.
Keeping the stores stocked
Same as with groceries, to avoid a situation where retailers could circumvent the regulation by simply not selling specific items anymore, the law specifies that if the retailer was selling an item on May 17, 2025 (the day before the regulation came into force), they cannot decide not to sell it anymore while the price margin cap is in place. The item in question must be stocked in line with how much of it was in stock in average throughout 2024. Moreover, if the store offers a store brand counterpart, the ratio of the store brand counterpart cannot be increased.
Retailers will be required to put up signs in the stores that announce the savings customers can achieve due to these regulations. You can find a sample here.
If the retailer fails to comply with these regulations, they can be fined (between HUF 500,000 and 5 million), or even closed down for a limited time (1 day – half a year). However, if the retailer can prove that the failure was due to reasons out of their power, the penalties may be waived.
Effects on Hungarian economy
According to the Hungarian government, thanks to this latest measure in the fight against inflation in Hungary, the price of the above listed household items and cosmetics already decreased by 24.9% in just the first week, which they consider a huge win for the population.
At the same time, the price cap margin for groceries is still in force, at least until the end of May. While the government is welcoming to benefits of the increased purchase power of salaries, small convenience stores are already losing business to big department stores, which in turn has adverse effects on GDP growth prospects.
Steady ally in accounting
Helpers Finance is a reliable partner in a developing business environment. We focus on working with foreign owners of Hungarian small and medium-sized businesses, providing not only accounting and bookkeeping, but also payroll and HR administration, as well as additional services that can support your Hungarian operation. If you need help, feel free to reach out and discuss your needs and plans with one of our experts.
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