Auchan, Penny and Tesco to be sold to Hungarians?
After the French Auchan announced that a Hungarian businessman, Dániel Jellinek, will buy the minority share of its Hungarian network, rumours about major buyouts started spreading.
G7 did some research and found out that three chains in total are stirring up interest, namely Auchan, Tesco and Penny Market. According to the portal, Penny Market has an estimated value of HUF 65-85 billion (EUR 182,653,185 – 238,854,165), Tesco is worth 270-350 billion (EUR 758,713,230 – 983,517,150), while Auchan supposedly has a value of 100-130 billion (EUR 281,004,900 – 365,306,370 ), but other theories about its market value conclude that the real value might be a bit lower, at a sum of 70 – 100 billion (EUR 196,703,430 – 281,004,900 ).
However, there is an issue with the rumours and the alleged plans to buy shared in these companies: Tesco and Penny do not plan to sell their shares.
Furthermore, based on their influence on the Hungarian market, buying one of them would not make a major difference. If the plan is to have more influential Hungarian chains, buying Tesco on its own would be enough, but Penny and Auchan have to be bought in order to make a change at the Hungarian market together.
G7 also mentioned that Prime Minister Viktor Orbán expressed in 2016 what the government’s plans were. He said that there are four areas where domestic capital needs to grow above international. These are media, banks, energy and retail network. Last December, government commissioner János Lázár said outright that foreign retail chains should be pushed out of the country with an “openly protectionist policy”.
Three sectors were acquired, but the retail network seems more difficult. In 2020 food retail had traffic of HUF 4,600 billion (EUR 12,926,225,400 ), but ideally, people should have spent 2,300 billion (EUR 6,463,112,700) at stores owned by Hungarians.
The business ventures of Dániel Jellinek and the Hungarian government might be familiar from our former article, in which we wrote about the businessman close to NER, who tried to buy Budapest Airport with no success. Then the government offered to buy the airport and even tried to use tactics to force the airport into selling shares. As Daily News Hungary wrote, the airport owners “no longer rule out the possibility of selling BA, but seek a higher price”.
The Hungarian economy has been an interesting topic lately. Many innovations are taking place in the country, and Hungary took 34th place on Global Innovation Index.
Hungary takes 34th place on Global Innovation Index
Hungary to be among top third European innovators by 2030?
Source: G7, Daily News Hungary
Still pushing this dream? If a Hungarian does manage to purchase any of these chains they will wreck it in short order unless they stop running businesses like they did in the Commuist era. Customers now expect better customer service, a wider selection of products and reasonable prices. Most of the Hungarian food shops struggle because they do not care to please their clientel
About a year ago during the pandemic I contacted Tesco and requested home delivery in the Kaposvar area that had not been available before. Guess what,? They expanded home delivery to my area and several other areas not before served. Maybe that was already in the works? I don’t know but at least they listened and actually responded. I appreciate this service and use it 2 or 3 times every month. Do you think any of the Hungarian owned chains would have responded and offered this service? I seriously doubt it.
Competition both foreign and domestic is almost always good for the customers. Leave the foreign chains alone and let them drive competition. This theme to end foreign competition reaks of cronyism at the highest levls of the Hungarian Government. Say No.
It is essential for Hungary to have Hungarian ownership of major supply chains. Good for national security. It is ludicrous and racist to suggest that Hungarians couldn’t run these chains effectively.
Istvan, not being racist at all. It is just a fact that most of the chain Hungarian food shops totally do not care whether their clientel get what they want or not, fact of the matter many Hungarian merchants have a you can take it or leave it attitude. Customer service is just not there. They won’t return emails or telephone calls, they refuse to add new merchandise and they act like this is 1965 Hungary under the communist regime with the attitude of products being offered are good enough for you and you should be happy with our stale bread choices and tasteless counter lunch meat and rubber cheese products. In 2021 that is unacceptable. Racism has nothing to do with the ownership and business practices of Hungarian owned food shops. I love Hungary and the people and culture. I have no dislike for Hungarian people, I just do not like spending my money at shops that could care less whether they meet my needs as a customer. I spend on average 150 thousand forints a month for food for my family. I expect and get my moneys worth at the foreign owned chains. At the CBA and other shops I never got the items worth the money. Step up your game Hungarian food merchants and drive the foreign owned competition out of business. Until you do stop begging the Hungarian government to drive away your competition.