Major international food chain to take legal action against Hungarian Government

The supermarket chain SPAR intends to file a complaint with the European Union concerning a special tax imposed by the Hungarian Government. The company contends that the Hungarian government’s tax policy violates EU laws, specifically regarding the free movement of goods.

Introduced in 2022 by Prime Minister Viktor Orbán‘s government, the tax is criticised by SPAR for its discriminatory nature and adverse impact on its operations, prompting a call for EU intervention to address the legal situation, as reported by Portfolio.

SPAR has criticised the Hungarian government’s special tax and the imposition of a price cap on certain food products. This price cap has led to shops selling products at prices lower than the acquisition cost, resulting in financial hardships. Despite a significant decrease in inflation, some of the measures are here to stay.

SPAR’s complaint to the European Union argues that these actions violate EU law, resulting in an increased cost of EUR 90 million and a loss of nearly EUR 50 million for the company in the previous year.

SPAR versus the Hungarian Government

In an interview with Gabriella Heiszler, President and CEO of SPAR Magyarország Kiskereskedelmi Ltd, conducted with Pénzcentrum, the CEO discussed the challenges encountered by retailers like Spar in Hungary. She highlighted that the sector’s profitability has been declining, with the dairy sector particularly experiencing a drop in profits for retailers, while producers and processors have maintained theirs.

As the second-largest retailer in Hungary, SPAR has faced criticism from Prime Minister Viktor Orbán for allegedly contributing to higher food prices. However, the CEO and other sources argue that the blame lies with factors such as rising raw material costs, inefficiencies in the food industry and the depreciation of the forint, which has increased the cost of imported products.

The Hungarian Government’s legislation

The need for a joint action

During her interview with Pénzcentrum, Gabriella Heiszler also highlighted the necessity for joint action within the entire commercial sector to reform the current rules. She underscored the challenges faced across industries, particularly concerning labour issues.

The CEO further emphasised the tightness of the Hungarian labour market and the importance for businesses to remain appealing to workers, especially regarding flexible working hours and weekend shifts. Following her comments on the Hungarian labour market, she discussed the significance of collaboration within the commercial sector to effectively address these challenges.

Heiszler pointed out that Hungary has stringent food safety regulations, citing examples such as restrictions on selling pre-cooked meat products with vegetables due to storage constraints. She highlighted the evolving consumer demand for such products and suggested that regulations should be reassessed to align with modern food storage capabilities and commercial requirements.

UPDATE

Popular international food chain flees Hungary due to PM Orbán and his oligarchs? – read details HERE

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