Spar leaving Hungary? Here is the official reaction
Gergely Gulyás, the Minister of the Prime Minister’s Office, said the government sued the German company for defamation. That means another round in the conflict between the Orbán cabinet and Spar. Will they finally give up and leave Hungary? Here is the official reaction.
Foreign retail chains “need to be pushed out of the country”
In 2020, János Lázár, Hungary’s Minister for Construction and Transport, said that the retail trade of grocery items had to be dominated by Hungarian businesses. Therefore, the government would like to break the power of foreign chains in that sector.
He plans to do that, among other means, by taking advantage of additional taxes and levies. That means the government would like to reach their goal not by increasing Hungarian companies’ competitiveness but by the administrative repression of foreign chains. That is what they seem to have started after the latest supermajority of Orbán’s ruling Fidesz-KDNP coalition.
Spar will be brought court for defamation
The current conflict followed Austrian Spar CEO Hans Reisch’s sharp criticism, slamming the excess profit taxes of the Hungarian government. Mr Reisch mentioned other government measures restricting competition in Hungary’s retail market. As a result, Spar turned to the budget supervision committee of the European Parliament. Afterwards, Gergely Gulyás announced that the Orbán cabinet would bring the company to court for defamation.
The company’s board of directors sent a letter to their employees after the scandal. They wrote they would be profitable without the extra burden of the Hungarian government taking away EUR 8,500 per employee every year from their Hungarian subsidiary.
EUR 76 million extra tax
They added they did not plan to leave the country. Instead, they would like to open new stores and renew the existing ones.
Gabriella Heiszler, the CEO of Spar Hungary, highlighted at an extraordinary press event that the Hungarian subsidiary was loss-making in 2023, just like in 2022. In 2023, they paid EUR 76 million extra tax to Hungary’s budget. Without that, they would have been profitable.
Concerning a possible exit, Heiszler said she was not a decision-maker in that issue. But based on her conversations with the owner, Spar would not leave Hungary, she added.
Spar Hungary employs 14 thousand people in Hungary and is Hungary’s fifth largest employer.
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At this very moment the Canadian government is trying to encourage foreign grocery chains to come to Canada to increase competition to lower prices while the Hungarian government tries to force foreign chains out. The Fidesz government is pushing foreign chains out to put more business in the hands of Fidesz connected oligarchs. Foreign grocery chains are already subject to discriminatory taxation compared to Hungarian grocers. My experience shopping in Budapest is that Hungarian owned CBA already has the highest prices and the lowest quality produce. We walked into one store and the meat on sale was green. What will come for Hungarians is higher prices due to decreased competition and lower quality. That’s what the Fidesz mafia government gives you.
https://toronto.citynews.ca/2024/04/19/canada-grocery-store-expansion-inflation-costs/
Another week, another threat by Spar to leave the country. Boy. Cry. Wolf. YAWN… Just go already.
Larry, Canadian government encourages foreign grocery chains to run business in Canada due to the fact that agricultural sector in Canada is poorly developed (due to the climate, lack of workforce and etc.). Have you ever seen the quality of the food there in Canada? Artificial crap. Fruits, vegetables, meat.
To my mind here in Hungary it is better to give the way to local producers, and encourage them to work and produce their goods. Instead of supporting global chains. As practically speaking in SPAR or any other chain meat, for instance, is much worse than at the local grocery market.
Mat you likely don’t know how grocery works or the global supply chains that have existed for years. You can go into a grocery store in Florida and find crap produce because the product that is grown literally a few hundred meters away from the store is shipped out of state. Don’t attempt to guess about Canadian agriculture and grocery. All dairy and meat products as well as grain is produced in Canada supplying local consumption. Fruits and vegetables are seasonal but a lot of tomatoes and cucumbers are grown year round in facilities. I have excellent grapes from South Africa in my fridge right now that I purchased for $1.99/lb. That works out to 1170ft per kilo. Supply chains bring produce primarily from California, Mexico and Florida in that order. I have been shocked at prices in Hungary and I shop at the Zugloi piac when I am there. When I can buy produce cheaper in Toronto that has been shipped from California than I can buy local or any other produce in Hungary that is a sad statement for Hungarians. Fresh milk is cheaper in Toronto. Hungarians can’t afford to eat and eliminating competition is just going to make it worse.
@michaelsteiner – SPAR does not want to leave. That´s the point. However – we have our Politicians who would love their friends and toadies to acquire SPAR for a nice, low multiple. Help out our Nemzeti Együtműködesi Rendszer Knights – who don´t expose themselves to market forces, since they can simply ask Politicians to make life hard for target companies?
“Hey. I really like your company. Maybe you should sell it to me, you know. Be done with all the pressure and challenges?”
https://www.spiegel.de/international/business/mafia-methods-viktor-orban-ups-the-pressure-on-german-companies-to-leave-hungary-a-cf38f4d2-1576-4f55-896a-b65f19542f43
“Business men”, indeed.
This how to keep killing the country.. and why we will continue to drive to Austria for cheaper, better quality groceries, produce and better selection instead of paying for rotten crap and over expensive produce and limited selection in CBA.
Hungary has no local decent supermarket chain of their own and punish the ones that actually give people the low prices they need. And I don’t even like Spar…, especially here. But CBA and Prima are expensive, essentially fidesz owned – and absolute crap, bottom of the barrel worst within Europe supermarkets.
Pushing out foreign retailers when they can’t even create a viable alternative and are so dependent already on the rest of Europe, and pretend you’re somehow self sufficient is blind and stupid.
@mat , having lived in Canada for many years, it’s far superior in terms of quality, price and variety to anything in Hungary, and even in the winter greenhouses thrive and provide locally grown, organic food, cheap co-ops and allotments for people to grow food in cities through the growing season.. even permafrost farming. You have absolutely no idea what you’re talking about.
It’s true the climate is not forgiving, but then their trade agreements are such that it’s even far cheaper to buy foreign goods – such as Italian olive oil and wine than here, and Hungary is basically right next door to Italy.
Hungarys climate and landlocked status and poor economy make it also extremely vulnerable and fully dependent on the outside world to exist, and yet fidesz supporters are under the illusion they can do it all within the borders. And the policies of foreign discrimination are not encouraging to Hungarians – it’s the opposite. Look around. Who is being inspired to innovate right now? What amazing companies come out of these policies?
Research how to make a pencil. You need 5 countries, graphite mines and rubber trees and factories, in countries all over the world in order to produce a single quality pencil. Only countries with the best trade policies and openness to the outside world succeed in manufacturing a quality pencil cheaply.