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 Hungarian government has introduced a new system requiring retailers to offer discounts on certain products like fish, poultry, eggs and coffee compared to previous prices. SPAR criticises this move, stating that it disrupts the market balance and unfairly favours smaller retailers. Despite the company’s complaints, the government has not responded, and the European Commission has also declined to comment.

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

Read also:

Filipino guest workers’ salaries in Hungary revealed – HERE
Government official: Orbán, Trump adhere to same values, interests – HERE

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4 Comments

Norbert says:

15/03/2024 at 15:56

No real surprise. Our Politicians LOVE spending other people´s money (remember, we are a major TAKER – https://www.statista.com/chart/18794/net-contributors-to-eu-budget/) and deflecting costs to commercial entities not in in family, friends, and toadies clique to make themselves look good. “Sovereign” indeed!
Orban/Varga - they were WARNED : says:

15/03/2024 at 16:13

Victor Orba was WARNED at the time of his Governments introduction of Price Capping, by those of greater “Learned” minds, that it would have SERIOUS ramifications in the Financial & Economic picture of Hungary.
Inflation – the “Mingling” government interference in the Inflation figure continuing, then the forint fluctuations – just (2) two of Serious reasons, why Price Capping was a High high RISK policy decision.
It has been a WRONG policy – proven it-self factually to be, that it’s after flow on negative effects are still evident in our Economy to-day.
Victor Mihaly. Orban and his Finance Minister – Mihaly Varga – they were WARNED.
It adds to the list of the Varga/Orban FAILURES of Economic & Financial policy and MANAGEMENT – that the changes that have been DISASTERS, and that we Hungarians to-day continue to pay for there ERRORS.
Freedomofspeech says:

16/03/2024 at 00:20

SPAR has put many small businesses out of competition and takes profits out of the country. If they don’t like the government inflation reducing policies they are free to get the hell out.
Democracy is Dialogue: says:

16/03/2024 at 14:47

Democracy – Freedomofspeech.
Democracy is Dialogue.
Image if SPA “pissed off” the choice variety of food stuffs now in Hungary from Supermarket chains “lags” behind “other” nearby European cities
Crazy commentary you submitted..