Hungary remains in the red zone of the Nanny State Index under the the authoritarian government of Viktor Orbán. It has some of Europe’s most intrusive nanny state policies on food, tobacco and e-cigarettes, including an extensive system of food and soft drink taxes, a full ban on smoking indoors and a total ban on e-cigarette flavourings. Hungary tops the table for over-regulation of food and soft drinks, and is third for both tobacco and e-cigarettes. If it had Scandinavian levels of alcohol taxation it would be a strong contender for the number one spot overall.

The Public Health Product Tax (commonly known as the ‘chips tax’) was introduced in September 2011 and levies sin taxes on a host of foods that are deemed to be high in salt, sugar and/or caffeine. The rates were increased by 20 per cent in January 2019 and include: sweets – 160 Forints (€0.50) per kilogram, soft drinks – 15 Forints (€0.05) per litre, energy drinks – 300 Forints (€0.93) per litre, condiments – 300 Forints (€0.93) per kilogram, jam – 600 Forints (€1.87) per kilogram, salty snacks – 300 Forints (€0.93) per kilogram. There are legal limits on the amount of trans-fats that food can contain and limits on the amount of salt that can be put into bread (a maximum of 1.57 grams of salt per 100 grams of bread).

Tobacco is heavily regulated with a vending machine ban and a ban on retailers displaying tobacco products in a manner that makes them visible from outside the shop. From the start of 2022, all tobacco products will be sold in ‘standardised’ (plain) packaging. There are no exemptions to Hungary’s ban on smoking in bars, restaurants and workplaces, and smoking is even banned in some outdoor areas. Tobacco retailing is a state monopoly, with licences allegedly handed out to party loyalists. Since May 2016, these shops have also had a monopoly on selling e-cigarettes. It has been reported that the government plans to turn the alcohol retail business into a similar state monopoly.

Until 2016, nicotine-containing e-cigarette fluid was effectively prohibited. It has since been legalised as a consumer product, but only barely. With cross-border sales banned and all e-cigarette flavours prohibited, including ‘tobacco flavour’, it has been estimated that 85 per cent of e-liquid consumed in Hungary is bought illegally. ‘A tax of 65 Hungarian Forints (€0.20) per ml was introduced in January 2017 but this was reduced to 20 Forints (€0.06) in March 2020 in an attempt to reduce cross-border shopping.

E-cigarette advertising is banned and vaping is prohibited wherever smoking is prohibited unless the vaping device was prescribed by a doctor (which is most unlikely).

Adjusted for income, Hungary’s taxes on beer and spirits are higher than the EU average, but wine duty is relatively low.

With thanks to the Hungarian Free Market Foundation