Orbán cabinet to push out foreign supermarket chains

The Hungarian government may pursue an openly protectionist policy that would threaten the large foreign supermarket chains. The government’s aim is to prevent food waste with this measure. According to the draft bill, foreign supermarket chains should give away food items with close expiration date to the state. In addition, the government would raise taxes on the stores involved.

Fight against food waste

Deputy Prime Minister Zsolt Semjén and Minister of Agriculture István Nagy submitted the proposal on the supervision of supermarket chains, writes 24.hu. The new proposal would take effect in February.

The retail sales taxes would also increase.

In addition, supermarket chains would be required to give away food items with a close expiration date to the state. Companies with a net turnover of HUF 100 billion a year must offer food items with a remained shelf life of no more than 48 hours to the state. The state established the Food Rescue Centre (ÉMK) Nonprofit Ltd. for this purpose.

Furthermore, the state would raise the retail sales tax from 2.5 pc to 2.7 pc.

The affected stores include Aldi, Auchan, Lidl, Penny Market, Spar and Tesco. The government aims to save food and curb food waste with these actions. According to statistics, Hungarians discard around 60-80 kilograms of food annually. This government’s measure could not only improve hunger rates but it would also result in other environmental benefits.

Is the proposal unconstitutional?

President János Áder had previously requested a constitutional review of the Waste Management Act. He argued that waste also has value and, therefore, cannot be discarded without consideration. Based on his view, products that have not yet expired certainly have value.

“It is mine, even if I cannot sell it, at least let me decide what to do with it,”

sellers may rightly think, according to telex.hu.

The retail sales tax increase would not only apply to supermarket chains but also to other outlets that sell industrial goods. However, the biggest issue would not be the rising tax rate, but the implementation of the product supply. The proposal would require stores to prepare a food rescue plan. The companies have to appoint a separate person in charge and follow a separate accounting process. The idea of how much a chain would discard in advance is unrealistic. After all, if they knew the exact demand, they would likely order less.

Many retail chains do not throw out food en masse, but, in collaboration with various organisations, they donated them to municipalities, animal shelters and people in need.

Source: 24.hu, telex.hu