Budapest, 24 April 2024 – Cup Revolution modified its commercial practice at several points during the competition supervision proceeding, and finally the Hungarian Competition Authority (GVH) warned and obliged the company to comply. The GVH found that one of the largest Hungarian reusable-cup distributors communicated to the consumers in a misleading way about the effects of the cups and the return system on the environment. At the same time, it could not be established that the applied commercial practice was aggressive, but an adverse effect on consumers could not be ruled out, therefore the GVH draws the attention of the catering establishments that use the returnable plastic cup system to ensure that their commercial practice related to the return of cups are reconsidered and their guests are informed in order to avoid infringements
In October 2022, the Hungarian Competition Authority initiated a competition supervision proceeding against Cup Revolution Ltd. because, according to the GVH’s suspicions, the commercial practice of the company that provide the cup return system (so-called re-cup) for numerous domestic festivals, concert venues, restaurants and sports events, as well as some of its environmental protections claims used in its advertising did not comply with the relevant legal requirements and could mislead consumers.
The GVH concluded that:
- from 5 August 2021 till June 2023, Cup Revolution Ltd. deceived consumers with certain environmental protection claims (categorized as “reusable/recyclable”, “waste reduction” and “sustainability/circulation/environmentally friendly operation”). During the proceeding, the company was unable to prove the validity of some of its advertising claims (e.g., “Using returnable and washable cups can reduce the waste production of events and catering establishments by up to 80%”).
- the general operation of the re-cup system used by the company cannot be determined – regardless of the solutions and information available at individual restaurants – that it would be suitable for exerting pressure or unfairly influencing consumers.
The Competition Council of the GVH during the decision took into consideration that:
- the company subject to the proceeding is a small business
- previously the competition authority has not established a violation against the company
- its commercial practice was not aimed at a vulnerable consumer group, i.e., not at children, the sick or elderly.
An important factor in the decision was that:
- after the launch of the proceeding, Cup Revolution reviewed and modified its commercial practices at several points (e.g., introduced an application to help redeem cups) and announced further improvements in 2024.
- during the proceeding, with the intention of complying, the company modified its infringing environmental claims (so called “green claims”).
According to the judgment of the Competition Council of the GVH, based on all this, the company’s future law-abiding behaviour can be rightly assumed, so the Competition Council issued a warning to Cup Revolution Ltd. The national competition authority considers it forward-looking from the point of view of consumers and fair market competition if a company subject to a procedure reviews its commercial practices after the initiation of an investigation by the GVH.
In addition to the warning, the Competition Council of the GVH ordered for the company that:
- review the communication tools it (currently) uses, with particular regard to the claims relating to the impacts on the environment,
- developing a program to help inform consumers about the operation of the re-cup system
Based on the results of the investigation, the President of the GVH sent a formal notice to one of the concert venues in Budapest using the re-cup system. In this context, the national competition authority draws the attention of all restaurants that use the system to ensure that consumers are informed as widely as possible about the use of the re-cup system, and to review their commercial practices related to the return of cups.
In connection with the case, the GVH strongly draws the attention of businesses to the validity of the environmental protection, so-called “green claims” used in their advertising communications. For this, guidelines are available from the latest broadcast of GVH Podcast, as well as detailed information from the green marketing guide of the national competition authority. The GVH also warns companies to provide consumers with transparent and detailed information about the operation of the services they provide.
Official registration number of the case: VJ/34/2022
GVH Public Service Communications Section
Further information:
Bálint Horváth, Head of Communication +36 20 238 6939
Katalin Gondolovics, Spokesperson +36 30 603 1170