How PM Orbán distorts competition in Hungary to favour government cronies: senior official speaks out

According to the office manager at Hungary’s Competition Authority (GVH), there are untouchable firms in the country that cannot be fined, with investigations against them ordered to be halted from on high. By contrast, chains like Aldi can be hit with massive penalties for the pettiest infringements. This grossly distorts competition, while aiding the rise of businessmen close to Orbán.

No probes allowed against government-linked firms

Many will marvel at how Lőrinc Mészáros, a man who began the early 2010s as a humble gas fitter and Orbán ally, became Hungary’s richest individual in just a few years, snapping up virtually every state contract he bid for as if by magic. Equal astonishment attends the case of the Prime Minister’s son-in-law, István Tiborcz, who likewise vaulted into the nation’s top five richest businessmen over a similar span. An interview with the GVH office manager on Partizán offers at least a partial explanation for these remarkable enrichments.

Zsombor Berezvai, an economist, claims the competition authority frequently carries out political commissions when imposing fines. There are firms, he says, that are exempt from penalties—and in whose cases investigations must even be dropped on higher orders.

In his view, the GVH no longer commits such criticisms or observations to paper if it knows they will be struck out for political reasons. The result of this self-censorship is that the authority makes no public criticism of the government’s price caps, profit margin freezes, or the recent protected fuel prices.

Huge fines for those out of government favour

In other instances, certain companies face exorbitant penalties—such as the nitrogen works linked to László Bige. Bige backed opposition leadership candidate Péter Márki-Zay in 2021-22, while his son has long supported the Tisza Party and sits on its Nyíregyháza branch. (Regrettably, this is inseparable from the fact that the nitrogen works is a bastion of domestic fertiliser production.) In 2021, it was slapped with a record 14.1 billion forint fine by Hungarian standards. Berezvai concedes there was cause for action, but deems the sum outrageously inflated.

“Excessive fining often targets firms the government dislikes,” the GVH office manager stated. He cited another example: German-owned Lidl, fined 186 million forints after it emerged that one of its croissants contained less wholemeal flour than claimed.

Berezvai believes the government particularly disfavours foreign retailers, as well as construction firms and mining companies unaligned with it. This stance, however, undermines Hungary’s ability to attract foreign direct investment, sowing uncertainty among investors. The upshot: less competition at home, higher prices, and stagnant productivity.

Working under political pressure

“If we divide the economy into three parts,” Berezvai added, “there is the ‘NER’ segment [an acronym for Orbán’s National Cooperation System], where we can do little; a segment where we try to act somewhat ‘hostilely’ in line with the government narrative—finding violations and levying higher fines; and a third where proper competition can truly be enforced. In cartel and consumer protection cases, the GVH does create real value.”

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In the interview, Berezvai noted he sought no permission to speak out and could be dismissed from the GVH as a result. He nonetheless felt compelled to air his experiences, as the authority has veered politically in the past year. There are many fine specialists there, he said, but the leadership labours under political pressure that often renders professional work impossible.

Here is the full interview: