Shops turn to Brussels over Hungarian price freeze

Lidl, Tesco and several foreign supermarket chains in Hungary feel that the Hungarian government’s measures take a serious toll on their businesses. They reckon this is due to “the deliberate exclusion of certain businesses from the market”. The chains are appealing to Brussels for justice.

Foreign shops facing problems

Numerous large foreign-backed retail chains in Hungary complain that “it is simply impossible to operate profitably in a sustainable way under the conditions imposed by the Hungarian government”. The Hungarian government’s food price freeze is “contrary to the principles of the EU internal market”.

German-backed Aldi and Lidl, Penny Market, French Auchan, Dutch Spar and British Tesco also expressed their discontent. According to politico.eu, an anonymous spokesman called on the European Commission to intervene.

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The price cap is not the only issue

Portfolio.hu contacted the foreign retailers concerned, but none of their managers wanted to be named. The big foreign players in the retail sector are not the only ones affected by the price freeze. There are two laws that do not affect franchised chains with a domestic background.

Last December, the Hungarian government voted in favour of a parliamentary decision to require chains with an annual turnover of more than HUF 100 billion (EUR 24,664,832.56) to supply food 48 hours before the expiry date without compensation. In the spring, Fidesz increased the special tax rate for these companies, citing crisis management.

Former government commissioner János Lázár said that the aim is to squeeze out foreign retail chains. Economic Development Minister Márton Nagy also voiced his opinion that domestic ownership in food retailing should be increased.

According to Politico, if the European Commission were to intervene in Hungary, it could be seen as the EU bureaucracy siding with retailers in a difficult time. People are struggling to make a living, and the Hungarian government is blaming Brussels for many of the country’s other problems.

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Source: politico.ez, portfolio.hu