Big supermarkets face headaches in Hungary

Foreign-owned retail chains are under scrutiny in Hungary in a bill presented to Parliament by the Minister of the Economy Mihály Varga

Foreign-owned retail chains are under scrutiny in Hungary in a bill presented to Parliament by the Minister of the Economy Mihály Varga

Foreign supermarket chains threatened by Hungary
Foreign supermarket chains threatened by Hungary

Under the new proposals large, usually foreign-owned retailers, with a 163m Euros annual turnover will be forced to operate at a profit for two years or face shutdown. The big retailers are already taking on board a huge rise in government inspection costs.

It seems obvious that the retail chains owned by Hungarians won’t be affected, or not affected adversely by these government moves. In fact the situation creates a huge market opportunity for them. It is also conceivable, that some of the retail chains will decide not to operate in the Hungarian market, simply because it is not worth it and they will exit the country.

Companies in the 163m Euro annual turnover bracket include Aldi, Auchan, Metro and Spar all loss-makers and Tesco and Lidl. The government suspects they are operating at a loss for competition purposes. Shoppers fear the consequences, “It could lead to many layoffs, lower salaries, that is the opposite what the government wants which is job creation,” said one consumer.

Sunday openings are also an issue. “They should be open, on Sundays people shop,” said another. Spar has reacted by saying it would postpone a significant part of its planned investments over the coming years. French supermarket Auchan added the measures discriminate against foreign firms, while Britain’s Tesco said it would assess the impact on its business.
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