Popular international food chain flees Hungary due to PM Orbán and his oligarchs?
The CEO of SPAR Austria, Hans Reisch, told an Austrian news outlet that PM Orbán wanted one of his relatives to invest in the company. That is how the Hungarian government wants to take ownership of the second-biggest food chain in the Hungarian market, Mr Reisch added. As a result, they started to take out capital from Hungary.
Orbán family wants to invest in the second-biggest food retail firm in Hungary
According to economx.hu, a Hungarian business-focused news outlet, SPAR modified its operation to protect itself from PM Orbán and his oligarchs. They decided to take some of their capital to Switzerland from Hungary.
The Salzburg-centred company gave some of the management rights of their North Italian, Slovenian, Croatian and Hungarian subsidiaries to their Swiss subsidiary. In a Friday article in Lebensmittel Zeitung, an Austrian food news outlet, Hans Reisch said the Orbán cabinet harasses their company with extra taxes and price caps. Therefore, they submitted a complaint to the European Commission and modified the operation of their Hungarian subsidiary to protect it from “Orbán’s hands”.
Photo credit: Daily News Hungary
Mr Reisch said Orbán asked them to let one of his relatives into the Hungarian branch as an investor. The long-term plan – the Austrian CEO added – is to take ownership of SPAR Hungary. He added it is not a unique problem. Last year, the European Commission highlighted in a report that Hungarian oligarchs obtained lots of foreign companies. Furthermore, the number of foreign market players complaining about the Hungarian authorities’ infringements and intimidation is growing continuously.
Here are SPAR’s extraordinary measures
Mr Reisch said they divided the Hungarian company into two parts to avoid a possible loss. They took property- and building management, retail and logistics rights from their Hungarian subsidiary and gave them to their Swiss company. Furthermore, the supermarket business is attached to their Austrian company, with which they can save EUR 10 million per year.
Photo: Daily News Hungary
Foreign companies like Lidl, Spar, Tesco, and Auchan dominate the Hungarian food retail sector. The Hungarian government raised its excess profit tax on retail companies from 4.1% to 4.5%. As a result, the income of the Hungarian subsidiaries fell considerably.
SPAR complained to the European Commission
As we wrote in THIS article, the Austrian chain filed a complaint against the Hungarian government at the European Commission, saying Orbán’s tax policy violates EU laws, specifically regarding the free movement of goods. Austrian economy minister Martin Kocher and foreign minister Alexander Schallenberg supported the move.
According to economx.hu, the loss of Spar in 2023 was EUR 47.8 million. In 2022, it was only EUR 32.8 million.
Ursula von der Leyen. Photo: facebook.com/EuropeanCommission
SPAR confirmed to Magyar Nemzet, a government-close media outlet, that all the foreign retail chains active in Hungary have already complained because of the excess profit tax in Brussels.
SPAR is the fifth biggest employer in Hungary with 14,000 employees. It operates two logistics centres, two meat-producing plants, an additional plant, and 368 shops. Another 273 places are part of their franchise network. SPAR’s earnings before interest and taxes were EUR 120 million in 2023.
Will Spar leave Hungary?
Mr Reisch said they would not like to give up their Hungarian subsidiary “because their situation is very comfortable” here. Their wealth reaches EUR 180 million in Hungary, and they invested EUR 2 billion here. Therefore, they would fight instead.
The Hungarian government wrote a laconic answer concerning the issue to telex.hu. They said the European Union found their retail excess profit tax lawful. “Those are the facts. Every other statement is ungrounded”, the Orbán cabinet added.
UPDATE
Government rejects SPAR’s ‘false claims’ regarding measures to bring down inflation, details HERE
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12 Comments
Never underestimate the value of having an Orbán family member “invest” in one´s enterprise!
Waiting for the “Biden Crime Family” adherents to chime in … Crickets …
What another – BLOCKBUSTER.
There is an old age saying = that if you repetitively STEAL – put your Hand in, take from your “Piggy Bank” or money jar, that sooner than later, your fingers are going to be CHOPPED off.
He is a Robber from the poor, the Government, the Political Party he leads, Victor Orban – from the needy, that continues to dismantle, the middle to lower class in our millions of Hungarians, that BUILDS – that the Rich in Hungary continue to get RICHER and the poor, growing in thousands, get POORER.
THINKING, the practice, of putting his hand in our money jar, taking just in the payment’s alone of our Taxes, or funding granted us by the European Union for us the citizens ALL of Hungary to derive betterment from, in his thinking and practicing of this – that Victor Orban his Fidesz Government of Hungary it is there RIGHT.
Democracy – is Dialogue.
This is another defining example, the wrongful use of Government practices that in the case of Hungary, the on-going GOALS of the Orban / Fidesz Government – to CONTROL us, to Eliminate citizens ability there un-restricted FREEDOM – to enable them to trade and invest freely, to live our lives that has NO- power nor control by an Un-Democratic Government, over the media, the judiciary, that use to Rule by Decree when it’s required, that see’s Education still muchly in it’s or on it’s WANT List.
Hungary we have are being FAILED.
Fidesz supporters will ignore all the criminality Orban and his mafia government involves itself in. Hungary is finished. It is a 21st century form of feudalism that Fidesz is creating according to the Russian model and with Kremlin oversight. The imprisonments will come shortly and the final phase is violence. Hungarians are once again being turned into peasants but that is where their minds have remained anyways. The EU needs to fight Fidesz with all means possible. For young Hungarians the best thing they can do is emigrate to the West and watch their home country go down the drain from a distance.
The young of Hungary should look seriously at a famous quote of Mahatma Gandhi.
It is a POINTANT message that all the youth, the young, the young families with “little ones” who are should be seen as the FUTURE of Hungary, should SERIOUSLY consider and “get down and dirty” peacefully, become involved and be advocates playing a personal role to have input and EFFECT – to SAVE Hungary, in the need to eradicate the Orban / Fidesz Government that have delivered us to our present place of DESTRUCTION.
Gandhi said :
” It’s easy to stand in a crowd but it takes courage to stand alone.”
Charges of corruption are not evidence of corruption.
Let’s get the details and the evidence first, and then all you Orbán-haters can get your day in court.
But not until then.
As in the United States, the media has leveled charges just yesterday – all of them in unison – that Donald Trump called for a bloodbath if he doesn’t get elected. 90% of the media and social media keeps repeating the lies. Of course once put into context, the Trump rant was about Chinese automakers in Mexico that are killing jobs in the USA. The bloodbath reference has to do with them IF TRUMP GETS ELECTED.
REF: https://tinyurl.com/229pgpcf
We have the same situation in Hungary.
Those who hate will keep hating.
They do what they do because of who they are.
Meanwhile, as in the USA, we know it is the opposition that is FAR MORE corrupt, greedy, and poisonous, don’t we?
READ ALL ABOUT IT: https://tinyurl.com/24gy76v7
@andrewbenjamin – at least it is undisputed that Mr. Trump is calling the January 6 rioters making their way through the justice system “hostages” who should be set free. Not speaking in riddles, there!
Re the tariffs – could be interesting if all the import restrictions go up, all over. Guess why we are doing so well with Chinese MNCs. It would indeed be a very unpredictable bloodbath, from the economic perspective.
Then there is the whole retribution matter. If this is the politics of the future, well – assume that means democracy is out of the window (exfenestration happens a lot in Mr. Putin´s Russia – very coincidental).
Odd thing regarding Mr. Trump. Why don’t his Generals and closest associates when he was President endorse him?
Benjamin Andrew – respectfully, your defence of the Orban – Fidesz Government of Hungary, falls over.
This Orban Government has been Judged found Guilty of practicing acts not in accordance of Law,
The Government led by Victor Mihaly. Orban print a copy of it’s CV and factually you will see the judicial rulings that have judged the Orban Government somewhat as repetitive offenders of Breaking the Law.
Orban and his Government – don’t understand the word Compliance, the need to practice under Law to Rules of Compliance.
” Innocent you are until found guilty” – rests comfortable with me.
It’s become over the period of 11 years in Hungary near an improbability to deal with Victor Orban through use of Dialogue.
Democracy is Dialogue and Orban’s “U-turn” his continuation of the Distillation of Democracy in Hungary leaves no facility in dealing with the Orban / Fidesz Government through Dialogue.
The mounting pressurization on Victor Orban, it must be forgotten, what still is before Courts for hearing and Judgements, what is in the process of being filed or lodged against Orban, the Fidesz Government of Hungary.
Pressurization, a country as is Hungary, bought to it’s present place, by a Prime Minister – Victor Orban and a Government, that is a cataclysmic “minefield”.
We know of the Guilt through Judicial judgements that are a HUMILIATION an Embarrassment through the Orban Governments exploitation, or there ABUSE of Law, having showing no RESPECT to Law(s).
There remain numbers of un-answered Legal matters still PENDING answers on the Orban – Fidesz Government of Hungary, in Brussels, before – The Courts of Justice of the European Union and issues “other” – that at this point in time may be referred to term of phase you use – just in argument or not of evidence that have not reached a stage as to whether they WILL be lodged filed for a Court or Judicial Ruling or “thrown out”.
The place of MASS disadvantage, the hole Orban has created, dug himself Hungary into quite a nadir place, under his Prime Ministership, that Globally, in country’s that are Governed under Democracy, have rightly concluded through evidence, over 11 years, that the Orban – Fidesz Government – control and rule over the Judiciary in Hungary.
This practice is of Mortal ruling in Democracy.
Orban with this FACT proven beyond reasonable doubt, just makes his name and Hungary’s name and reputation in the eyes of Brussels in The Courts of Justice of the European Union – look exposed and highly vulnerable, when matters come before them.
Impartiality is a NEED in Law, as is the non Emotional position of importance – the remaining of being impartial and emotionally DETACHED – separated.
Orban is CHALLENGED by Law, as he has proven in the past, that HE thinks he is ABOVE the Law.
No news here. SPAR has been taking profits out of the country for years. Let the greedy SOBs leave.
Andrew, I read The Walrus, The Onion, the New Yorker etc regularily. Have just been reading about how in 1991 US pres Bush & Canadian Prime Minister Mulroney & Mexican president had drafted the NAFTA agreement. Then in ’93 Cinton was president & signed it into law, in Jan. of ’94 Mulroney aslo signed and the autoindustry of both the US & Canada went south to Mexico. Many of out family freinds in Ontario (Hungarians) lost their livelihood. The Chinese have also become part of the Mexican pact but they HAD already been doing manufacturing in Mexico since the very early 19th century, as had some US manufacturers. But this latest NAFTA formalized deal really shot the bottom out of the industry with the way that the tarrifs were set up. More money in the pockets of eveyone except the final citizen buying vehicles. With the low pay to Mexican workers, the low standards for safety issues etc etc why are vehicles as expensive as basic houses? There is nowhere that politicians don’t end up the winners. The lifestyle that the Mulroney’s enjoyed, not as a result of what he did for individual citizens while being Canada’s P. M. (Not even talking about the paperbags of cash he got caught accepting that he did not pay taxes on.) They are mostly all criminals sadly. I don’t know if anyone has taken in and hidden more $ than the Clintons thru various schemes….at least the Kenedy’s had big businesses way back when…worked so it could be seen as ‘work’. Trump is not so different than those other polliticians in the US who manipulate things for their own pockets frist.
Was it not Austrian Food Co. that send second class merchandise to Hungarian stores. Good riddance.
@ Freedomofspeech: this is what multinational companies do, it happens the world over. They operate a local subsidiary, employ people, pay their taxes and provide a generally useful or desirable product or service (in this case, both). It’s up to the parent company the degree to which profits are expatriated or reinvested locally.
You think a local owner would de facto serve the country better? I’ve news for you. A crony capitalist oligarch buyer would employ every trick to minimise tax paid while maximising profit. The quality of the goods on offer could easily become worse and/or more expensive. There’s zero guarantee that profits would be reinvested in Hungary, more likely they’ll end up in an offshore tax haven via myriad intervening companies ensuring the beneficial owner pays near to no personal tax on their dividends. Hungarian ownership does not confer that the business will operate in the best interests of the country because (like any company) it operates in the best interests of the company and its ultimate beneficial owner alone, national interests don’t come into the equation. I fail to see how Austrian owned Spar are in any way harming Hungarian interests, they’re another good quality grocery chain on the local market and serve to keep competition high and therefore put a lid on food price inflation, along with the other international chains.