This Hungaricum is much cheaper in Italy than in Hungary

Piros Arany, an undeniably Hungarian product, also classified as Hungaricum, is more than 70 percent cheaper in a shop in Italy than in Hungary. At first glance, this difference is staggering, but if we examine the reasons, experts say it becomes clear how this is possible.

Piros Arany, a Hungaricum that is cheaper abroad

Piros Arany, or Red Gold, is a paprika paste produced by Univer in Kecskemét since 1967, and it has been used as a sandwich spread and condiment since 2016. Therefore, it is surprising that a newly uploaded TikTok video shows a 160-gram package of the Hungaricum costing 99 euro cents in an Italian shop, while at the same time in Hungary, the price for the same product in a local Penny store was 659 forints, Pénzcentrum reports. The difference is significant: the Hungaricum is 71 percent more expensive in Hungary than in Italy.

This much-loved Hungaricum is more expensive in its home country than abroad. Photo: hungarikum.hu

One might say that the Italian price is a bargain, but it is hard to imagine a discount of around 70 percent, writes the portal. Thus, the Hungaricum is certainly cheaper at its original price in Italy than in most shops in Hungary. The price seen in Penny aligns with pricing trends observed in other local stores, according to Pénzcentrum’s research.

It is also noteworthy that the product was covered in February, showing that, according to the price pattern at that time, the legendary Hungarian product was more expensive in Slovakia than in Hungary. This suggests that Hungarian products often cost more domestically than abroad.

Why are Hungarian products more expensive in Hungary than abroad?

The domestic sale of Hungarian food products is significantly more expensive than in other European countries, which is why even Hungarian brands are cheaper in many countries abroad, said Lajos Braunmüller, editor of Agrárszektor. He emphasised that the main reason for this phenomenon is the domestic economic and regulatory environment.

Photo: Daily News Hungary

For example, the higher prices can be attributed to several factors: different VAT rates, post-packaging charges, and retail costs. Hungary’s VAT rate is relatively high compared to many other European countries, contributing to higher retail prices. Post-packaging and retail charges may also be higher in Hungary, further increasing costs. Additionally, higher inflation and wage levels in Hungary can drive up production and operational costs.

The impact of competition, or the lack of it, should not be neglected according to experts, as a smaller domestic market allows for less intense competition, which can lead to higher prices. In contrast, the European market is much more competitive. Additionally, better income conditions in the EU can influence pricing strategies, sometimes making products cheaper abroad.

So at the end of the day, in this complex system, it is not surprising that a Hungarian product like Piros Arany is cheaper in Italy than in Hungary. Once the reasons are clear, it is easier to understand why a product made in Hungary can be less expensive to sell abroad than domestically. The fundamental reasons for this can be traced back to the characteristics and specificities of the domestic economy.

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