From next week, tobacco wholesale monopoly enters into force in Hungary. The transformation is a multi-million business for some people, but there are many more losers. The new tobacco retailer is in no hurry to negotiate with the suppliers, tobacco shop owners are afraid of supply disruptions and accumulate reserves, and more than a thousand jobs will be lost. The price of tobacco products will soon be jump significantly due to the Hungarian and the EU regulations, index.hu wrote.
The government nationalizes the wholesale part of the tobacco market as well such that existing market players get the right to supply tobacco shops. Taban Trafik, a company of Continental group owned by Janos Santa who is also interested in tobacco shops, benefited. They cooperated with British American Tobacco and won the concession at a relatively low price.
Thus was created the National Tobacco Shop Supply Ltd (ODBE) which was rapidly declared nation’s strategic importance by prime minister Viktor Orban, so the Hungarian Competition Authority cannot examine it even it distorts competition. Moreover, the company is exempted from business tax as well.
The weekly newspaper Figyelo wrote that tobacconists were afraid that the new system will have a difficult start, so they tried to accumulate significant reserves of cigarettes.
According to index.hu, tobacco shop owners can expect a 40%-increase in cigarette prices by 2017. An EU directive is in the background which wants a 60-euro-tax per 1000 cigarettes. This value has not been reached by the cheaper cigarettes.
In addition, Janos Lazar announced at Thursday’s government press conference that a HUF 4- special tax is planned on the particularly unhealthy tobacco products.
based on the article of index.hu
translated by BA