Mfor: Orbán cabinet will squeeze foreign supermarket chains, Spar remains a target

Targeted audits and tax increases are expected in Hungary to bleed out foreign supermarket chains like Spar. Yesterday, János Lázár, Hungary’s construction minister, sent an open threat to the Austrian chain and other foreign companies, saying those foreign chains that do not respect Hungarians should leave the country. It seems the Orbán government will help some of them do so.

Orbán cabinet wants to reduce the foreign companies’ market share

According to mfor.hu, the Orbán cabinet aims to reduce the market share of foreign companies in the food retail sector. Nándor Mester, the editor in chief of mfor.hu, told ATV that targeted tax audits and tax increases await the foreign supermarket chains in the Hungarian food retail sector. Furthermore, he expects significant fines from the Hungarian Competition Authority (GVH).

Mr Mester added that interfering in the market processes with regulation is a common practice in the European Union. However, the extent of that regulation is not all the same. And it should not be used as a tool to help Hungarian companies acquire a higher rate of the market.

Mr Lázár made it clear before that helping the Hungarian food retail companies advance in the sector is one of the goals of the Orbán cabinet. However, mfor.hu’s editor-in-chief believes the government should increase their competitiveness with preferential loans instead of political and economic means.

Source: spar.hu

Foreign companies are more effective

It happened before that the government gave some money to Hungarian companies in the construction sector, and that resulted in the decrease of the market share of the foreign raw material suppliers. But in the food retail sector, competition is brutal. Multinational companies buy immense amounts of products (for a lower price), extend their activity to Europe, have a strong logistics background and organise processes more effectively. As a result, they can keep their prices low.

Gábor Csongár, a tax expert, said the Hungarian government may increase extra taxes. However, both agreed that Spar would not leave Hungary since they would not let their investments perish. Instead, they will fight even in Brussels.

Photo credit: Daily News Hungary

Minister: “We can swim against Spar*”

Lázár said yesterday that he did not want to squeeze out the Austrian company and the multinationals in general, of the country. He just wants to force them to “respect the people, the consumers, the government and the country where they make huge extra profits.”

“We can swim against Spar*. The company will pay the price for what it has done in the past few days,” Lázár said in his heated speech. (*In Hungarian, he said “a Sparral szemben”, which is a word play on “az árral szemben”, which means “against the current” – ed.)

Photo: FB/János Lázár

We wrote HERE that Orbán’s oligarchs wanted to buy shares in the Spar, but its Austrian owners rejected the idea. The head of the company said then that they would not leave Hungary. Spar is the second-biggest food retail firm in Hungary. They modified the operation of their Hungarian subsidiary to protect it from “Orbán’s hands”.

Jobbik leader asks Integrity Authority review on Spar allegations

Opposition Jobbik-Conservatives are turning to the Integrity Authority with a request that it examine whether a criminal act was committed in connection with allegations concerning Austrian supermarket chain Spar.

Spar’s head told media outlets that Prime Minister Viktor Orbán had tried to convince Spar to sell a minority stake to one of his relatives, Márton Gyöngyösi, the party’s leader, told a press conference on Friday, adding that when the Hungarian government introduced a special tax on various foreign subsidiaries, it was a form of “blackmail” aimed at getting the companies to sell business stakes to friends or family members of the prime minister or other government members.

Gyöngyösi suggested that this was the reason why Spar had submitted a complaint to the European Commission and the EU budget committee. He also suggested that this could be the reason why an EU country report said last year that the government regularly harassed foreign investors in Hungary.

Read also:

• Major international food chain to take legal action against Hungarian Government – Read more HERE
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