SPAR vs Orbán war continues: Austrian CEO wants infringement procedure against Hungary
SPAR remains incensed by the Hungarian government’s introduction of an additional retail tax—often referred to as an “excess profit” tax—following the fourth consecutive landslide victory of Prime Minister Viktor Orbán and his co-ruling Fidesz and KDNP coalition in 2022. SPAR is urging the European Commission to initiate another infringement procedure against Hungary and has emphasised that the company will undertake improvements if the government removes this additional financial burden.
SPAR presses for an infringement procedure against Hungary
We have reported on several occasions that the Hungarian state budget is grappling with serious financial challenges due to reduced consumer spending in the aftermath of COVID-19, the war in Ukraine, and the inflation crisis. In response, the government introduced several extra taxes, including what they term the “excess profit tax”. In theory, retail chains are required to pay an additional 4.5% tax, but in practice, this cost is often passed on to consumers. According to the supermarket franchise, this results in a EUR 90 million shortfall each year, preventing them from initiating development projects in Hungary, even though the market urgently requires investments in logistics.
As reported by economx.hu, the retail chain continues to lobby the European Commission. The company is pushing for the Commission in Brussels to initiate another infringement procedure against Hungary over the excess profit tax. This information was reported on Friday by Lebensmittel Zeitung, a German publication specialising in the food market. SPAR has stated that if the government were to abolish this additional tax, the company would begin investing in Hungary, which is their largest foreign market.
Spar. Photo: Daily News Hungary
SPAR’s CEO, Hans Reisch, has indicated that the company faces significant logistical challenges in Hungary, necessitating investment to remain competitive. However, their revenues are currently in the negative, largely due to government-imposed food price caps and the additional tax. We previously reported that SPAR restructured its operations in Hungary to shield itself from business circles close to Orbán. Property and building management, as well as retail and logistics rights, have been transferred from their Hungarian subsidiary to their Swiss company. Additionally, their supermarket operations have been attached to their Austrian company, allowing them to save EUR 10 million per year.
Hungarian minister slammed SPAR
Ahead of the European Parliamentary elections on 9 June, the European Commission had yet to decide on SPAR’s call for an infringement procedure. Nevertheless, CEO Reisch continues to push for action, despite a 2020 ruling by the European Court of Justice stating that progressive extra taxes are not illegal within the European Union.
The first clash between the Hungarian government and SPAR occurred this spring. The Austrian CEO criticised the Hungarian government’s tax policies, prompting János Lázár. Minister of Construction and Development—widely believed to represent Orbán’s views on such matters—to respond by calling SPAR an “Austrian grocer”. He added that multinational companies should learn to respect Hungarian consumers and the government.
Photo: FB/János Lázár
A new trade policy strategy in the making?
Dániel Molnár, a senior analyst at the Makronóm Institute, commented that SPAR is no longer competitive in the Hungarian market due to high prices and an outdated business model. Csaba Bubenkó, president of the modern trade union Egyenlő.hu, remarked that SPAR should not treat the Hungarian retail sector as a “flea market”. He argued that it has been profitable for multinational companies to operate in Hungary, given that they generate substantial profits, have opened thousands of stores, and have sometimes acted against the interests of Hungarian companies. Moreover, they have failed to pay competitive wages and have sold lower-quality food products than those available in Western markets, resulting in immense profits.
Photo credit: Daily News Hungary
Economx.hu also consulted other market players who expressed dissatisfaction with the excess profit tax. However, they clarified that SPAR’s attacks in the foreign press are undermining their efforts and are calling for a new trade policy strategy in Hungary. They added that SPAR is provoking the Hungarian government and turning a taxation issue into a political one.
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6 Comments
The Real Person!
The Real Person!
“due to reduced consumer spending” – it’s because Hungarians do their shopping in neighbour countries. If you go to Kaufland in Slovakia you think you are in Hungary, most shoppers are Hungarians. Keep the affa at 27% and get nothing!
The Real Person!
The Real Person!
Pressurization on the name – Victor Mihaly. Orban is near a place of gargantuan proportion.
Orban, has for time, been CORNERED – from ALL sides, by country’s that are DEMOCRACY.
The Russian War – has “un-dressed him” exposed his undergarments, his “veiling” of his CREED – that continues to “serve” as his ultimate DEMISE.
The nature of the individual, the self belief in his persona that he is Indestructible, in “vainness” – believing of his immortality, the – ALL sides- of what is a “Bear Pit” – that we know, through history – the GASHLY “finished” results / picture, the individual Victor Mihaly. Orban – that he has continued to “feed into” – through, and in the conduct of his rhetorical Political image / style, that “exhumes” he is an Antagonist.
Victor Mihaly. Orban is an Adversary.
It can’t be dismissed that over years, as Orban has “Forged” on, in his dictatorial style of Prime Ministership, that he has EXHIBITED the fanatical acceptance of his Political Ideas and Philosophy – Ideology – that is a Dogma, and that ALL, likened to LEMMINGS – his Government – Politicians and SUPPORTERS of Fidesz – all have “taken a Bite” – chewed and FEED off, that is Rabid.
Damage – the “zenith” of on-going, this Victor Mihaly. Orban – administers on Hungary – WORSENS.
The Real Person!
The Real Person!
If SPAR does not want to play, SPAR can leave Hungary.
The Real Person!
The Real Person!
As Mr. Lázár says – obey the Government!
https://miniszterelnok.hu/en/speech-by-prime-minister-viktor-orban-at-the-33rd-balvanyos-summer-free-university-and-student-camp/
Chilling stuff.
The Real Person!
The Real Person!
At least this time they didn’t “threaten” to leave Hungary, like they did a dozen times in the past two years alone…
Our country, our rules. Hungary does not bend to the diktats of globalist corporations.
Don’t like it, you know where the door is.
The Real Person!
The Real Person!
SPAR, GTFO of Hungary. You parasites have sucked enough Magyar blood.