Did you hear that the government wants to replace all foreign food stores?

Interestingly, this is not a new plan since the government declared first in 2010 that they would like to increase the share of Hungarian businesses to 50 pc in the retail sector. However, g7.hu says that this does not mean getting support to increase Hungarian companies’ competitiveness but the administrative repression of foreign chains.

Though the government was very successful in increasing the share of Hungarian companies in the energy and bank sector or the media, they did not reach their goal in the retail sector. Most of the Hungarian consumers still visit British and French hypermarkets, German discount stores, and Austrian supermarkets. And the overall view does not indicate any favourable changes for the government since Aldi, Lidl, and Penny Market are expanding while country stores are suffering because they are losing their consumers, g7.hu reported. Therefore,

they will receive a lot of financial allowances in the next EU support cycle.

Former Minister of the Prime Minister’s Office, János Lázár, who now serves as the leader of the rural development commission, said last year that the retail trade of grocery items has to be dominated by Hungarian businesses, and the power of foreign chains needs to be broken. According to him, chains of foreign retail trade need to be pushed out of the country in favour of independence, national autonomy, and the reorganisation of agriculture.

He plans to do that, among other means, by taking advantage of additional taxes and levies.

That means that the government would like to reach their goal not by increasing Hungarian companies’ competitiveness but by the administrative repression of foreign chains. Therefore, g7.hu compared the efficiency of German (Aldi, Lidl, Penny Market) and Hungarian food chains (CBA, Coop, Reál).

Based on the numbers, one German supermarket reached a trade level four times higher in 2016 than the Hungarian ones. Moreover, this rate worsened in the last three years, and today, the difference is sixfold. Furthermore, one worker in a Hungarian supermarket generated approximately six times as much income as their counterpart working for a German company. Meanwhile,

German owners can spend two times as much money on their workers as their Hungarian competitors.

Finally, Hungarian food chains are more expensive than German ones. Based on the subjective comparison of g7.hu, Príma, a Hungarian food chain, is 14 pc more expensive than the average of Aldi and Lidl (they compared the price of the same basket of goods).

As a result,

g7.hu says that foreign food chains are more effective than Hungarian ones.

Therefore, if the government pushes out foreign chains, that can result in higher food prices.

Source: g7.hu