Hungarian parliament passes Sunday shopping ban

By bne IntelliNews December 17, 2014

bne IntelliNews -

 

Hungary’s parliament has approved a bill forcing large retailers to stay closed on Sundays, in a move critics say is yet another swipe at international investors.  

The bill is the latest of a number of government measures that will hit the country's large supermarket chains, which are mostly foreign-owned. It will force most of them to shut up shop on Sundays from March 2015, MTI reports. 

Prime Minister Viktor Orban, whose ruling Fidesz party enjoys a constitutional majority in the lower house, has defended the bill. He said it protects Sunday as a Christian day of rest. He also noted that neighbouring Austria and Germany have similar restrictions.

According to the bill passed on December 16, the ban will not apply to shops with retail space of under 200 square meters, on condition that the staff on Sunday include a business owner with a stake of at least 20%, or a family member. Other exemptions include tobacconists, pharmacies, retail units at airports, train stations, prisons or hospitals, farmers' markets, petrol stations,  and stores on military precincts. The bill limits opening hours to 6 am to 10 pm.

Many see Fidesz's policies in sectors such as retail, banking and utilities as dictated by the interests of domestic players. Critics accuse the party of close connections to domestic retailers, including CBA, Coop and Real, which mostly run small stores that duck under the restrictions. 

It's notable that that the trio has long supported the Sunday shopping bill, despite the wider sector's resistance. CBA chief Laszlo Baldauf has been forced in the past to deny speculation that he is a major source of funding for Fidesz. 

Last week, lawmakers adopted a law requiring fast moving consumer good retail chains with an annual turnover of more than HUF50bn (€160mn) to close if they fail to report a profit over two successive years. 

The government claims large chains have been deliberately running at a loss in recent years, dumping prices to increase market share. While the big international retailers can afford the losses, the tactic is driving smaller local retailers into the ground, the bill claims.

In November, parliament approved a major hike to the supervision fee payable by food retail chains, which will put more pressure on profit at large grocery retailers such as Spar, as well as others such as the UK's Tesco. 

Dutch retailer Spar, which operates around 400 outlets in Hungary, will hold a news conference on December 17 to announce changes to its corporate strategy in response to the government’s tough measures on grocery chains.

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