The legal tightening regarding disposable plastic packaging is acceptable for environmental reasons, but the product charge to be paid on packaging materials will increase significantly: in the case of non-degradable materials the product charge to be paid per kilogram has been increased from 57 to 1,900 forints, while in the case of degradable material from zero to 500 forints. This means that in the future, much higher extra fees can be charged for plastic bags in Hungary. Miklós Nagy, Secretary General of the National Association of Packaging and Materials Handling spoke to Növekedés.hu about the changes affecting the Hungarian packaging sector.
How did the coronavirus pandemic affect the packaging industry?
Every year, the National Association of Packaging and Materials Handling summarises statistical data on the packaging industry reported by the Central Statistical Office.
Last year’s figures show that the paper, metal, plastic, wood and glass packaging output of the sector reached 720 billion forints.
In practice, we calculate this output on the basis of the Hungarian production by deducting the value of the export, and adding the value of the import. In the first four months of this year, there was a 1.8% increase, which was made up of a higher demand for packaging materials in March, and a lower demand in April.
Parliament passed the regulation on disposable plastic packaging materials. What does this mean for the sector?
Half of the provisions of the legislation apply to the manufacture of packaging. However, the new rules only have a limited impact on the domestic packaging sector. If we take into account banned plastic and polystyrene foam cups and boxes, as well as food boxes and PET bottles, I can say that the new restrictions only affect five per cent of the total packaging
If we take the whole of the plastic packaging industry, the impact is 13 percent, but this higher ratio is mainly due to the production of PET bottles. Without that, it merely affects a few percent only.
It’s important to note that the original bill was going to ban bags or sacks with a thickness of less than 50 microns, but fortunately this has been changed.
Now, according to a compromise approved of by the EU, bags and sacks with a thickness of less than 15 microns can still be manufactured and used, although the product charge has been significantly increased in return.
In the case of non-degradable products, the charge to be paid per kilogram was increased from 57 to 1,900 forints, while for degradable products, which used to have no charge before, from now on a charge of 500 forints per kilogram was introduced.
This fee will eventually be paid by the consumer.
Yes, because the goal is to reduce the use of these packaging materials.
If customers have to pay for tear-off bags used for vegetables or bakery products, they will think twice whether they use them or how many products they put in each bag.
How environmentally conscious are Hungarian customers?
Everyone seems to be environmentally conscious when surveys are being conducted; everyone accepts more expensive but environmentally friendly packaging. However, when people actually go into a store, almost everyone chooses the cheapest solution.
Manufacturers have the same approach: first they seem to be keen to implement eco-friendly solutions and then, when they face the costs, they immediately back down. My expectation is that when the regulation comes into force and these packaging materials become more expensive, everyone will suddenly change their mind. It is a completely realistic expectation, which I also support, that environmental pollution should be reduced. The industry does constantly address this issue, both by developing technologies that produce more packaging from less material, and also by combining different kinds of material.
What percent of domestic packaging is produced by foreign-owned companies? How much packaging material is imported?
The ratio of both exports and imports is around 50 percent. This is explained by the fact that most manufacturers that produce quality raw materials are foreign-owned.
Although there are more domestically owned companies, the vast majority of forint-denominated output comes from multinational companies.
Which are the largest foreign-owned manufacturers in Hungary?
Hamburger Hungária Kft., a member of the Austrian Prinzhorn Group, is a manufacturer of corrugated base paper. Dunapack, which specializes in corrugated paper processing, also belongs to the same group. STI Petőfi Nyomda Kft., as a member of the German STI Group, is one of the leading cardboard box manufacturers in Central and Eastern Europe, and there is also German-owned Edelmann from Zalaegerszeg, which also specializes in cardboard-based packaging.
Tetra Pak is another multinational company with a large output, and Owens Illinois in Orosháza is also a major producer in the field of glass packaging. In metal packaging, Ardagh Group has significant capacity, with one factory producing tins and the other producing aluminium aerosol cans. Paccor Hungary Kft. has a prominent role in plastic packaging, mostly producing containers and glasses used for food packaging. Then there is Alpla Műanyag Csomagolóipari Kft., which produces PET and other plastic bottles, and we should also mention Mondi, which has several factories in the country, producing paper bags and plastic packaging.
What about the largest Hungarian manufacturers?
In the field of paper packaging, Keskeny Nyomda and Box Print, while in the production of flexible or plastic packaging materials, Krajcár Csomagolóipari Kft., Lászlópack Kft. Sipospack Kft. and Rotapack Zrt are to be mentioned. In metal packaging, Pickopack Zrt. has significant capacity in the production of metal cans and three-part aerosol bottles. Mátrametál Kft. is also considered to be strong in the production of aerosol bottles.